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Taxes 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 i
by rhino369 9y ago
Taxes 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.