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I've heard the former but I have never heard the latter unless it's been one of my friends in PE trying to justify it. It's the investor's job to make sure the
by rat_1234 9y ago
I've heard the former but I have never heard the latter unless it's been one of my friends in PE trying to justify it.
It's the investor's job to make sure their investments are producing an adequate risk-adjusted return, not the government's job to help you get there.
- rhino369 9y agoTaxes change the expected value of an investment. Thus, it changes the amount of risk v reward. If I have you 51% odds on a coin flip, that's a good bet. But if you only get paid out 60% when you win, it's a bad bet.
- aylmao 9y agoWhat I gather from the 2000 dot-com bubble, the 2008 financial crisis and a slew of startups I've been seeing lately (cue, Juicero) is that _perhaps_ there should be a little more risk to investment. Idk, my own opinion here.
- rhino369 9y agoThere was a ton of risk (they lost their pants) but they just didn't recognize it.
- robrenaud 9y agoIf you made a thousand of those 51% bets, you could deduct the losses from the wins, and you'd be back to profitable.
- rat_1234 9y agoOk yes that's definitely a fair point. To be clear I like the idea of the tax code being simpler and rates lower since it unlocks more NPV positive projects by removing an important cost. But I do think that's a different argument by a few degrees than the idea that capital gains taxes should be lower to somehow compensate investors for their risk.