3.2 Taxes

In case, those sources of transfers are taxes, what is happening is partial exhausting already created profit:

Planned sales are higher than wages, and therefore they are not achievable at global scale without loans or transfers. If we take some part from profit and use it to finance such additional resources, we are getting buying power higher than wages paid to employees. Resulting are higher sales, which are still not at the level of planned sales as there is still some profit retained by which amount are planned sales lower against achievable, that is potential buying power.

Effect of taxes is evident, it immediately increases buying power but it is still not enough to full planned sales.  The reason is simple, planned sales are higher by untaxed profit and so the wages are still not adequate to provide full needed buying power. At global scale the transfers from profit alone cannot be used permanently to stimulate economic activity as higher and higher taxes are increasing the buying power but at the same time they are lowering profit to zero. In such extreme case are taxes 100%, sales are at the level of wages and taxes (there is full realization of planned sales) but the profit is 0.

While the effect of interest and consequent lowering of profits because of falling sales isn´t so obvious (indeed, companies are neither aware of it and are not thinking about the fact that sales gained  through loans will have certain global consequences) transfers from profit by way of taxes are much easily understood and companies are fighting them ferociously. Therefore always, if there is a new government which plans higher taxation, the stock markets are aiming south. It is obvious, when adhering to taxing strategy there is direct fall in profits but sales are rising. Therefore, the effect of taxing will slow down creation of profit but will increase sales and economy turnover.

Not even taxes by themselves will create sustainable source of economic growth and profit making. If they were to be at the level that would guarantee realization of full planned sales it would mean 100% taxation, which would be not very motivational for the companies. If they are at lower level, planned sales are not achieved exactly by missing part of the profit, which remains untaxed. At the global level, it is impossible to achieve profits through taxes long term.