Profits, Taxes, and “Free” Homes: AOC’s Dumbest Statement Yet?

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Assuming you’d rather laugh than cry, Alexandra Ocasio-Cortez is the gift that keeps on giving. She cannot open her mouth without saying something utterly ridiculous – especially when she is virtue signaling.

At a town hall event in the Bronx she stated:

We have to make sure that housing is being a legislated as a human right. What does that mean? It means that our access and our ability and our guarantee to having a home comes before someone else’s privilege to earn a profit.

She’s either unaware or unimpressed by the distinction between negative rights and positive rights.

A negative right requires nothing but inaction on the part of others – the right to life simply requires that others not kill you. 

A positive right requires that other people take action… like build you a house.

How you have the right to the labor and resources of others is beyond me. Moreover, something does not become a “right” simply because it is desirable. 

But the most interesting aspect of her statement is about how a right to a house comes before the “privilege” to earn a profit.

First, profits are

simply what’s left over after expenses are subtracted from revenue. That’s it. 

Second, profits are not

a privilege. They’re earned. Brave people go into business despite knowing they might never be profitable. 

Finally, profits are proof that scarce resources are being used to satisfy demands. They’re proof that value has been added to the resources being used. Profits should be celebrated, not condemned. Losses occur when scarce resources are being squandered on things undesired by the public at large. Losses make society poorer.

Click here if you want to learn more about the function of profits and losses from economist Tom Woods. 

But you don’t need to be interested in economics to appreciate the absurdity of her statement.

Who is going to pay for these homes?

Tax payers. 

Ocasio-Cortez is famous for hating big business – she claims they don’t pay enough in taxes.

But taxes are only owed when profits are made. 

Businesses don’t incur a tax liability when operating at a loss – or somehow break even down to the penny. So, she literally needs companies to make a profit so that it can be taxed to pay for her “free” homes that everybody supposedly has a right to.

Here’s the kicker – who is going to build these homes? A bunch of independent contractors?

Think about all the stuff that goes into homes: lumber, copper, steel, plastics, appliances, etc.

How many copper mines do you know that are owned and operated by an individual? How many independent contractors are out there pumping oil and making plastics?

Of course, the government would need to pay businesses to build the “free” homes.

But if the “right” to a home comes before the “privilege” of earning a profit, then it would seem that the companies involved with building the “free” homes would need to operate at a loss until the last one is built.

Yes, another brilliant plan from congresswoman with a degree in economics – make us all wealthy by operating businesses at a loss.

I cannot wait to see what she says next.

 

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