4 ms·

I agree, I didn't say we were at the perfectly optimal point of equality of opportunity. I was defining what I think the term means. I agree with most of thos

• dragonwriter 11y ago
  > Except social security cap -- social security was supposed to be a benefit, not a tax. You don't get paid more after that cap is reached. There is a social security benefit cap, but its on final benefits based on lifetime social security qualified earnings adjusted to account for wage inflation from the year earned. Capping annual social security qualified wages and tax liability isn't actually essential to maintain the integrity of that scheme (and it arguably is unfair treatment to income earners based on degree of annual income volatility.) Further, the benefit formula already has bend points where aggregate qualified wages past a certain point contribute less in benefits per dollar of wages than below that point, so there's no reason that couldn't be extended and the benefit cap removed, possibly with another bend point. > And capital gains tax is a stupid example Asserting that is not an argument. Capital gains are income, and it doesn't make a lot of sense to treat them more favorably than other income in taxation, except that you want to favor capital holders over those deriving income from other sources. (It may make sense to excluded them from the kind of SS/Medicare taxes and qualification calculations, though arguably this is unfair to minor capitalists who must actively manage their own capital to derive income from it, and face similar issues to actual workers when it comes to loss of their own ability to do so; it would makes ense to include individually-received capital gains in both the tax and benefit calculations for SS & Medicare). Favorable treatment of long-term capital gains is sometimes justified, in a progressive tax system, by the fact that not giving some favorable consideration overtaxes the capital gains as they are not earned over a single year, but progressive tax is based on the presumption that the income received in that year is earned in that year. But when you have enough capital that you can structure it such that you are consistently rotating holdings so that you are regularly realizing "long term" gains, that's less sensible. A more sensible approach to addressing this problem -- which also addresses labor income that has volatility, where the peaks are enabled by the choice to work in a domain where the troughs are also an occurrence, is to simply set up a system for all income where income can be recognized for tax purposes in advance of being realized (and thus, taxed) without limit, and also, with some limits on time and amounts, deferred after realization for tax purposes, giving tax payers with irregular income from whatever source the ability to smooth those irregularities within the structure of a progressive income tax system, without structurally favoring those with large, consistent, capital income streams.