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The returns to capital (capital gains specifically) are taxed at a much lower rate than income, and they're not taxed at all until they're realized, which means

The returns to capital (capital gains specifically) are taxed at a much lower rate than income, and they're not taxed at all until they're realized, which means they can be timed to offset losses. Then the government is effectively handing out a subsidy to people with lots of capital, even more so than the lower tax rate. "The market" not attractive enough - there's nowhere to put your money other than "the market" (including bonds, commodities, real estate etc.) unless you keep it in currency, and that's even more susceptible to government takings.

banned1 9y ago
https://taxfoundation.org/why-capital-gains-are-taxed-lower-rate/ https://taxfoundation.org/why-capital-gains-are-taxed-lower-... Is there a limit you see in taxes? Do you have investments yourself? Maybe you donated all of your investments to the government after realizing how little you were being taxed?
- barrkel 9y ago
  I most recently converted my investments into a house deposit. In effect, I propped up inflated house prices. It'll take a while before I have a significant investment position again. Your last question is silly. The reason why I can simultaneously support higher taxes, yet not voluntarily donate money to the government, is because advocacy of higher taxes can raise far more money for government than my personal donations. Raising money to fund government is a collective action problem; if government relied on donations to run, it would fail because of freeloaders - in essence, a tragedy of the commons. But by collectively enforcing mandatory taxes we can make government work.
  - TheSpiceIsLife 9y ago
    > But by collectively enforcing mandatory taxes we can make government work. It's arguable whether giving government more money results in government working better. By some accounts government is a demonstration of waist and an exercise in excess. Government departments are always chronically underfunded, primarily because no government department PR employee ever got promoted by saying "we have enough money".

banned1 9y ago

https://taxfoundation.org/why-capital-gains-are-taxed-lower-rate/ https://taxfoundation.org/why-capital-gains-are-taxed-lower-... Is there a limit you see in taxes? Do you have investments yourself? Maybe you donated all of your investments to the government after realizing how little you were being taxed?

barrkel 9y ago
I most recently converted my investments into a house deposit. In effect, I propped up inflated house prices. It'll take a while before I have a significant investment position again. Your last question is silly. The reason why I can simultaneously support higher taxes, yet not voluntarily donate money to the government, is because advocacy of higher taxes can raise far more money for government than my personal donations. Raising money to fund government is a collective action problem; if government relied on donations to run, it would fail because of freeloaders - in essence, a tragedy of the commons. But by collectively enforcing mandatory taxes we can make government work.
- TheSpiceIsLife 9y ago
  > But by collectively enforcing mandatory taxes we can make government work. It's arguable whether giving government more money results in government working better. By some accounts government is a demonstration of waist and an exercise in excess. Government departments are always chronically underfunded, primarily because no government department PR employee ever got promoted by saying "we have enough money".