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Every point you make applies equally well to labor: 1. The higher the labor tax rate, the fewer people will work. 2. Higher labor tax rate makes for less effi

Every point you make applies equally well to labor: 1. The higher the labor tax rate, the fewer people will work. 2. Higher labor tax rate makes for less efficient economics because workers will prefer lower-paying (less stressful) jobs. 3. Wage tax brackets are not indexed for inflation. Given these, why should the tax code prefer capital ownership to labor?

WalterBright 8y ago
1. only if they have alternatives to work. 2. are you sure about that? Lower paying jobs tend to be more stressful. 3. they are last time I looked, though those things change over time
- millstone 8y ago
  This sounds like the gross argument that it's more efficient to tax labor because they have no recourse. The rich can move, hire lawyers, etc. to avoid taxes, so more it's efficient to focus on the hapless poor! The rebuttal is to simplify the tax code as to eliminate loopholes, such as preferential income taxation. You're right and I was mistaken that tax brackets are indexed for inflation. I'd support indexing capital gains if it eliminated their preferential taxation.
  - colechristensen 8y ago
    >1. The higher the labor tax rate, the fewer people will work. This is what you said and is basically untrue. It is not a gross argument, we are talking about how taxation motivates people. The fact that wage income is taxed does not seem like it would make people work less. This may be different if we ever start a significant movement towards a post-scarcity economy where automation makes necessities so inexpensive that people with even a small amount of capital do not need to work. Then you might have to do strange things to incentivize people to do the few jobs that need humans.
stealthmodeclan 8y ago
1. The higher the labor tax rate, the fewer people will work If higher tax rate pays for better infra and healthcare, more people are likely to work. 2. Higher labor tax rate makes for less efficient economics because workers will prefer lower-paying (less stressful) jobs. Isn't labor tax progressive, so bottom earners do not pay a high rate. Higher paying job might have more stress but it's offset with more disposable income and there is strong incentive to invest this disposable income into lowly taxed capital gains setup in the absence of which either people will hoard this money (where it sits doing nothing or hold onto worse performing assets) or spend it ( increasing inflation (which isn't good for economy) 3. Wage tax brackets are not indexed for inflation. Yes, for higher wage earners there is strong incentive to purchase stocks/real estate to enjoy lowly taxed capital gains.

WalterBright 8y ago

1. only if they have alternatives to work. 2. are you sure about that? Lower paying jobs tend to be more stressful. 3. they are last time I looked, though those things change over time

millstone 8y ago
This sounds like the gross argument that it's more efficient to tax labor because they have no recourse. The rich can move, hire lawyers, etc. to avoid taxes, so more it's efficient to focus on the hapless poor! The rebuttal is to simplify the tax code as to eliminate loopholes, such as preferential income taxation. You're right and I was mistaken that tax brackets are indexed for inflation. I'd support indexing capital gains if it eliminated their preferential taxation.
- colechristensen 8y ago
  >1. The higher the labor tax rate, the fewer people will work. This is what you said and is basically untrue. It is not a gross argument, we are talking about how taxation motivates people. The fact that wage income is taxed does not seem like it would make people work less. This may be different if we ever start a significant movement towards a post-scarcity economy where automation makes necessities so inexpensive that people with even a small amount of capital do not need to work. Then you might have to do strange things to incentivize people to do the few jobs that need humans.

stealthmodeclan 8y ago

1. The higher the labor tax rate, the fewer people will work If higher tax rate pays for better infra and healthcare, more people are likely to work. 2. Higher labor tax rate makes for less efficient economics because workers will prefer lower-paying (less stressful) jobs. Isn't labor tax progressive, so bottom earners do not pay a high rate. Higher paying job might have more stress but it's offset with more disposable income and there is strong incentive to invest this disposable income into lowly taxed capital gains setup in the absence of which either people will hoard this money (where it sits doing nothing or hold onto worse performing assets) or spend it ( increasing inflation (which isn't good for economy) 3. Wage tax brackets are not indexed for inflation. Yes, for higher wage earners there is strong incentive to purchase stocks/real estate to enjoy lowly taxed capital gains.