> That you choose to reinvest all of your profits back into the company should be immaterial. But a guiding principle of taxes is: discouraging unwanted behav

> That you choose to reinvest all of your profits back into the company should be immaterial. But a guiding principle of taxes is: discouraging unwanted behaviour (or encouraging, through tax cuts / subsidies). We want to encourage corporations to invest, i.e. "putting the money back into the economy". Keep buying those new machines, upgrading your assembly line, upgrading your fleet of cars, for ever increasing efficiency and economic activity. If you're talking about one company investing buy buying products from itself (like Google is, here), then hopefully the money one branch deducts from its revenue becomes additional profits for the other branch of the same company. Sure, in theory, practice and theory are equal. In practice, they're not. Tons of loopholes exist around just this aspect of accounting and tax law. But there is at least a theoretical reason to tax profits, over revenue.