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> When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more. Agreed. We should be ruthlessly
by mullingitover 6y ago
> When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more.
Agreed. We should be ruthlessly taxing capital gains, and in general should look upon money earned without laboring for it with scorn.
- throwaway201103 6y agoSo taking an investment risk so that a startup can grow is to be looked on with scorn? You might be posting in the wrong community.
- mullingitover 6y agoReally there just shouldn't be any privileged category for capital gains and it should be taxed like regular income, progressively.
- throwaway201103 6y agoWell that's a bit different than your earlier statement that we should "ruthlessly tax" capital gains. Capital gains get a favorable treatment because we want to encourage investment that creates economic growth, but comes with risk of loss.
- mullingitover 6y agoI mean, we ruthlessly tax working for a living, I just don't see why we don't tax speculation gains the same.
- apta 6y agoTwo wrongs don't make a right.
- valuearb 6y agoThe reason for giving capital gains a preferred long term rate is inflation. If you invest in business for 10 years and double your money, you've made a 7% annual return. But if inflation averaged 7% during that time you actually made zero economic gains. A better way to restore progressively to capital gains is to index them for inflation, and then you can tax them at ordinary income rates.
- pashamur 6y agoYeah, it was an aha moment for me when I understood the reason for the cap gains / normal tax difference. It makes sense that it's an attempt to index for inflation, although strange that there is only one cutoff (securities held for 1 year taxed the same as the ones held for 10 years); you would imagine some sort of step-down function would make more sense / track inflation more accurately (or indexing directly which is much harder). So maybe different tax rates for 1/5/10/20 years held?
- valuearb 6y agoYou don't need different tax rates, just indexing. Lets have a single fair set of rates with progressivity. A rich man in the 35% tax bracket should pay 35% on their capital gains, just as a poor retiree in the 15% tax bracket should only pay 15% on capital gains.
- deleted 6y ago[deleted]
- pdonis 6y ago> money earned without laboring for it Tell that to startup founders whose only income from all the work they put in on their startup is capital gains.
- webmaven 6y ago> > money earned without laboring for it > Tell that to startup founders whose only income from all the work they put in on their startup is capital gains. I think there really ought to be more of a distinction made between taxing the upside of sweat equity vs. literal capital gains (as in, the return on invested capital). Also, startup founders should only be deferring their salary (or a portion of it), not forgoing it entirely. For that matter, it's insane that VC fund managers only pay capital gains tax rates on carried interest and management fees. The fees are really just ordinary income plain and simple (which they get regardless of how the fund does), and while carried interest is technically a return on invested capital, it's entirely OPM and seems like a dodge that lets the manager participate in the upside of the fund with no actual skin in the game, so what's the point of taxing it at a preferential rate?
- apta 6y agoOthers are not interested in your socialist/communist policies.