Can the Federal Government earn a profit?
I believe I remember hearing about a rule that prevents the US Government from earning a profit because it exists to serve the citizens. It can recoup expenses in areas like postal operations, but not earn a profit.
Can anyone confirm or refute the existence of such a law. If the law doesn’t exist, can anyone provide an example where the government makes a profit? I can identify several organization that recoup expenses. For example, the Post Office recoups the cost of delivering mail.
Just to be clear—Taxes are not profit. Profit is based upon providing a service or product. IE: Walmart makes a profit when it sells me an alarm clock and my barber makes a profit when he provides the service of cutting my hair.
MLaw: I'm not asking about revenue unless it's generated from the sales of a service or good. I agree that taxes are revenue, but they are not profit. Does the government create and sell or purchase and resell any product or service with the intent of making more money than related expenses?
- Anonymous1 decade agoFavorite Answer
"Profit" is a technical economic term that relates to a net gain after expenses by an economic entity. Governments don't earn profits; they have revenues. It is entirely possible for revenues to exceed expenses in a given period of time or for a given government agency or department to earn revenues over expenses for an extended period of time. For instance the Internal Revenue Service of the Treasury Department has an enormous revenue surplus (resulting from the tax laws) every year over its operational expenses. That surplus is paid to the Treasury which then pays for all the thousands of government agencies that are revenue negative each year. There are lots of other agencies that collect fees (set by Congress) that are either used by those agencies for their own expenses (set by Congress) or paid into the Treasury for incorporatioi into the general fund from which other government expenses are paid (as designated by Congress). No agency, nor the US Government itself is making a "profit" or making a "loss."
- 1 decade ago
Only if you are the commander-in -chief or the vice president and you own an oil company.