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The only point that seems unfair is point 3, which can be mollified by adjusting for inflation. If we reduce points 1 and 2 to their logical conclusion, capita

The only point that seems unfair is point 3, which can be mollified by adjusting for inflation. If we reduce points 1 and 2 to their logical conclusion, capital gains should not be taxed at all. This is idiotic. Due to the structural advantages individuals with money have investing, you'd basically be creating a system where people with money would capture almost all of the wealth. The end goal shouldn't be the most efficient economy possible, it should be the highest standard of living for the individuals in your country. To that end, a certain amount of taxation is necessary.

harryh 8y ago
> If we reduce points 1 and 2 to their logical conclusion, capital gains should not be taxed at all. This is idiotic. FWIW a great many people believe that capital gains should not be taxed at all. And while there are certainly fine arguments against that point of view, I don't think it's fair to say that "it's idiotic" when their p.o.v. is based on solid economic theory.
- Declanomous 8y ago
  I'm familiar with the theory, but I think economic theories that only looks to maximize economic productivity while ignoring philosophical or ethical concerns are idiotic. If you don't take into account what is being produced and why, you are left with a line of tautological reasoning that more productivity is good because more productivity is good. The reason this is idiotic because there are a lot of ways to maximize productivity where the vast majority of people do not benefit. Not only that, but there is absolutely no reason that maximizing the productiveness of an economy results in maximum utility (in the philosophical sense). Even if you could demonstrate that economic productivity was positively correlated with (philosophical) utility, you'd have absolutely no guarantee that utility would be distributed equitably. You could literally have 1 super happy person with everyone else on the planet enslaved in perpetual (productive) agony. That's even before you get into the fact that maximizing production now probably ends up creating a hellscape of a planet tomorrow. Of course you could argue that you can account for all of this using negative externalities. In that case you might as well tax capital gains to account for the negative externalities. I suppose you could tax something else, like lifetime earnings, but the point is I feel comfortable making the claim that not taxing capital gains is idiotic.
  - WalterBright 8y ago
    Capital gains taxes resulting in less efficient resource allocation does not imply that it is instead allocated in an ethical way, nor distributed more equitably, or any of the other notions mentioned. Having a more efficient economy means there's a surplus that enables resources to be expended on environmental and social concerns. Hungry people don't care about those things. There's a reason poor countries tend to be the worst polluted. Lastly, efficiency isn't about maximizing production. It's about maximizing productivity, i.e. production/cost.
    - Declanomous 8y ago
      I never said that less efficient resource allocation would result in more utility. That's a straw man. My claim is the argument that more efficient resource allocation would result in greater utility is almost certainly false in a hypothetical situation where capital gains tax is eliminated. What evidence have we ever seen that allowing wealthy individuals to make more money results in increased utility? There is literally no reason to believe that any of the marginal increase in resources would be expended on environmental and social concerns. The only reason you could justify eliminating capital gains is if you literally believe all government is evil.
      - WalterBright 8y ago
        > What evidence have we ever seen that allowing wealthy individuals to make more money results in increased utility? SpaceX is a modern example. Historically, people of great wealth have been able to invest in great projects. Scientists historically have been wealthy people. The guy who won WW2 was a wealthy man who invested his fortune into developing radar. Many historians believe that radar shortened the war considerably and saved an awful lot of lives. Wealthy people donate a ton of money to universities to fund research. (UW has a Gates building and an Allen building.) > on environmental and social concerns The Gates Foundation, for a modern example. For a historical one, see the Carnegie libraries.
        notahacker 8y ago

harryh 8y ago

> If we reduce points 1 and 2 to their logical conclusion, capital gains should not be taxed at all. This is idiotic. FWIW a great many people believe that capital gains should not be taxed at all. And while there are certainly fine arguments against that point of view, I don't think it's fair to say that "it's idiotic" when their p.o.v. is based on solid economic theory.

Declanomous 8y ago
I'm familiar with the theory, but I think economic theories that only looks to maximize economic productivity while ignoring philosophical or ethical concerns are idiotic. If you don't take into account what is being produced and why, you are left with a line of tautological reasoning that more productivity is good because more productivity is good. The reason this is idiotic because there are a lot of ways to maximize productivity where the vast majority of people do not benefit. Not only that, but there is absolutely no reason that maximizing the productiveness of an economy results in maximum utility (in the philosophical sense). Even if you could demonstrate that economic productivity was positively correlated with (philosophical) utility, you'd have absolutely no guarantee that utility would be distributed equitably. You could literally have 1 super happy person with everyone else on the planet enslaved in perpetual (productive) agony. That's even before you get into the fact that maximizing production now probably ends up creating a hellscape of a planet tomorrow. Of course you could argue that you can account for all of this using negative externalities. In that case you might as well tax capital gains to account for the negative externalities. I suppose you could tax something else, like lifetime earnings, but the point is I feel comfortable making the claim that not taxing capital gains is idiotic.
- WalterBright 8y ago
  Capital gains taxes resulting in less efficient resource allocation does not imply that it is instead allocated in an ethical way, nor distributed more equitably, or any of the other notions mentioned. Having a more efficient economy means there's a surplus that enables resources to be expended on environmental and social concerns. Hungry people don't care about those things. There's a reason poor countries tend to be the worst polluted. Lastly, efficiency isn't about maximizing production. It's about maximizing productivity, i.e. production/cost.
  - Declanomous 8y ago
    I never said that less efficient resource allocation would result in more utility. That's a straw man. My claim is the argument that more efficient resource allocation would result in greater utility is almost certainly false in a hypothetical situation where capital gains tax is eliminated. What evidence have we ever seen that allowing wealthy individuals to make more money results in increased utility? There is literally no reason to believe that any of the marginal increase in resources would be expended on environmental and social concerns. The only reason you could justify eliminating capital gains is if you literally believe all government is evil.
    - WalterBright 8y ago
      > What evidence have we ever seen that allowing wealthy individuals to make more money results in increased utility? SpaceX is a modern example. Historically, people of great wealth have been able to invest in great projects. Scientists historically have been wealthy people. The guy who won WW2 was a wealthy man who invested his fortune into developing radar. Many historians believe that radar shortened the war considerably and saved an awful lot of lives. Wealthy people donate a ton of money to universities to fund research. (UW has a Gates building and an Allen building.) > on environmental and social concerns The Gates Foundation, for a modern example. For a historical one, see the Carnegie libraries.
      - notahacker 8y ago