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>Income tax rates have little effect on the already-wealthy because most of their money is not distributed in the form of a wage or salary No, the fact is we d
by cmurf 9y ago
>Income tax rates have little effect on the already-wealthy because most of their money is not distributed in the form of a wage or salary
No, the fact is we differentiate between salaried "earned" income and tax it much, much higher, than investment "unearned" income. It's a very explicitly designed system that encourages stuffing the left overs into real estate, stocks, bonds rather than take the risk of starting or growing a business.
This is not a John Rawl's country, where we believe in "the veil of ignorance" thought game. If it were, there would be no such thing as tax free gifts, and low or non-existence inheritance tax.
- skookumchuck 9y agoStocks & bonds are investing in growing a business.
- cmurf 9y agoOnly IPOs transfers cash directly to a growing business, all other stock trades are shareholder trades, the company sees none of that money. Corporate bonds do help grow businesses, but these are dwarfed by government bonds, which are just another way of transferring money from the vast majority of living and future generations, to a tiny number of current living people.
- 1123581321 9y agoThe part about trading not mattering to companies isn't true. One, companies issue additional shares after IPO. Two, the fluidity and likely future viability of the market affects IPO feasibility and price. Three, stock price affects employee compensation. Four, companies that own shares in other companies benefit from liquid markets just like retail investors. Corporate bonds also trade on the secondary market and that has similar consequences.
- skookumchuck 9y agoAlso, if trading didn't matter, corporations wouldn't be so concerned about the stock price.
- 1123581321 9y agoThey might actually be more concerned. Look at startup valuation for an example of how they might behave.