> The labor tax is theoretically adding value to the economy while capital gains is basically money you made because you had money. Capital adds value to the e

> The labor tax is theoretically adding value to the economy while capital gains is basically money you made because you had money. Capital adds value to the economy too, thats why people will pay to rent it. > I've never understood why the capital gains tax is lower than the labor tax. One good reason is that if the capital gains tax is higher than the marginal profit, then that business doesn’t exist. If we taxed capital at the rate that we tax labor, there would be one or two ultra-hyper-wealthy people who employed everyone, and the rest of us would be serfs working for bezos or the government, or on public assistance. > It seems to me it should be the opposite if you want a productive economy, encourage more people to put their money to work instead of playing games in the market. Investing your money is putting it to work, that is precisely why it earns a return.