The mysterious 30%

The government plans on setting a maximum profit of 30% for everyone and everything in Venezuela. Funny enough, Maduro says he is doing so to preserve people’s economic...

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30 percent signThe government plans on setting a maximum profit of 30% for everyone and everything in Venezuela. Funny enough, Maduro says he is doing so to preserve people’s economic freedoms.

Hmm, let’s see…

  • how do you calculate the 30% profit for a free-lance journalist? A hairdresser that makes house calls? A pet groomer? A cleaning lady?
  • An airline buys an airplane – how do you estimate 30% Does depreciation enter into the equation? Do you calculate it over the total cost of the airplane?
  • How do you calculate the maximum profit a bank can make? Over its entire portfolio? Over the value of its assets?
  • What about lotteries – do they get the 30% rule applied to them?
  • What about universities? Are they allowed to make a 30% profit? Profit above what, exactly?

Ultimately, the 30% rule will be selectively and arbitrarily applied to punish certain companies or individuals, because that is the only way it can be applied.