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It is not true that raising taxes on investment gains disincentives investment. If you start taxing investments more, it's not like the rich will suddenly stop
by littletimmy 11y ago
It is not true that raising taxes on investment gains disincentives investment.
If you start taxing investments more, it's not like the rich will suddenly stop investing. You should hear Warren Buffet talk about this. No rich person is going to go like "Well... I could make money on this, but not going to do it because the state is going to tax it..." This is something that happens only in abstract economic models, not in the real world.
In fact, if you raise taxes rich people may be incentivized to work harder to find better investments with higher gains.
- hga 11y agoNo rich person is going to go like "Well... I could make money on this, but not going to do it because the state is going to tax it..." Utter bullshit, which has been reflected in actual US investment history since the Capital Strike of 1937. The perception of fairness goes both ways, you know. Not to mention reflected in my father's (and others') economic behavior as the Reagan tax rate cuts took effect, and they put much less effort into sheltering income from very high tax rates (generally, something with a net vector sum of zero) and focused more on just, you know, running good businesses. Then there's the minor detail that a tax increase can turn a profitable investment into a loss. The constant chaos of changing tax rates, or at least serious proposals to do so, also changes the nature of investments, for example favoring quick gains before the government might ruin it.
- whatok 11y agoAn increased tax rate absolutely affects investment behavior. A wealthy person is going to evaluate whatever tax-advantaged investments there are and make a decision based on that. As long as a the US has a ridiculously complicated tax code, individuals with the means will find loopholes around targeted taxes.