You are ignoring that the net profit has to be sufficiently high to offset risk in the financial calculation. Expected ROI calculations are always net of taxes, inflation, and risk. Many businesses that look "profitable" on paper are uninvestable due to inflation and risk, so reducing realized net profits pushes more businesses into this category.
There absolutely is a level of positive profit below which it makes more financial sense for investors to sit on their money.
Governments are aware of this and set their taxation policies accordingly. That is why long-term capital gains usually have a relatively low tax rates. There is a high drag on expected ROI due to inflation and risk that makes many of those investments unattractive ceteris paribus.
There absolutely is a level of positive profit below which it makes more financial sense for investors to sit on their money.
Governments are aware of this and set their taxation policies accordingly. That is why long-term capital gains usually have a relatively low tax rates. There is a high drag on expected ROI due to inflation and risk that makes many of those investments unattractive ceteris paribus.