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The answer to the first question is the time-value of money. The capitalist has put his capital into the production and is delaying the return on his investment
by mrchucklepants 11y ago
The answer to the first question is the time-value of money. The capitalist has put his capital into the production and is delaying the return on his investment to the future. The employee is being paid now, regardless of when the income from their labor is realized. This is why a good is sold for more than the worker is paid. The worker is not being paid less than their labor is worth.
- nemo44x 11y agoAnd the money earned with labor is taxed heavily while the money earned with capital is taxed minimally. This seems fair?
- zo1 11y agoMoney earned through capital gains, yes. Investing your capital into business/machinery yields higher profits. Those get taxed at corporate tax rate, which is 35%. This rate is only matched with the highest income-tax rate bracket. It may not "look" fair on the surface, but to compare capital gains tax with income tax is an oversimplification. For one, invested capital is unpredictable.