State Capitalism in China earns a lot of Tax Revenue from Big State Tobacco

Posted by PITHOCRATES - February 4th, 2012

Week in Review

Big corporations are evil.  That’s all you hear from those on the Left.  These people hate corporations.  Capitalism.  And the private sector in general.  Where people pursue profits.  Instead of the wellbeing of our fellow citizens.  Like they do in China.  Where state capitalism rules supreme.  And the government puts people ahead of profits (see Poisonous gift posted 1/28/2012 on The Economist).

China’s tobacco industry is both owned and regulated by the government. It makes and sells more than two-fifths of the world’s cigarettes—2.4 trillion in 2011, 3% more than in 2010. The government says the industry took in profits and tax receipts of 753 billion yuan ($119 billion) in 2011, an annual increase of over a fifth. Production, sales and tax receipts are likely to increase for years to come.

Yes, the economic model that those on the Left want us to adopt is worse than Big Tobacco.  For the tobacco companies in China not only kill people in pursuit of big profits.  They’re owned by the government.  So it’s the government killing people in pursuit of profits.  Funny.  Because state capitalism isn’t supposed to work that way.  At least, that’s what those on the Left would tell us.  Government is good.  Corporations are bad.  Yet here is government being worse than the corporations.

Perhaps state capitalism is not all it’s cracked up to be.  Perhaps government can be just as bad as corporations.  Or even worse.  For corporations clearly state that they protect the interests of their stockholders.  Government is supposed to protect the interests of the people.  So who is worse when people get hurt by smoking?  The government, of course.

So why do they do it?  For the same reason the U.S. government won’t criminalize cigarettes.  They want people to smoke for the same reason the Chinese government wants their people to smoke.  The tax receipts.  Addiction is good.  It fills the government coffers.  And as long as it does people will be smoking.  Governments everywhere will make sure of it.

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