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Maybe we should get rid of the payroll taxes? The operating assumption underlying all of your arguments is that bigger government is better. I do not agree.

Maybe we should get rid of the payroll taxes? The operating assumption underlying all of your arguments is that bigger government is better. I do not agree. It seems to me that government has passed the tipping point where it's primary motivation is to sustain it's own growth. It may be better for society to rebuilt the reliance on local community and family vs continuing to make bad investments in growing our mega bureaucracy.

dragonwriter 5y ago
> Maybe we should get rid of the payroll taxes? I have, indeed, made that argument before. > The operating assumption underlying all of your arguments is that bigger government is better. No, the operating basis is that – completely independent of either the desired size of government or the desired target tax revenue (you’ll note I’ve not talked about the desirable absolute rates of any taxes, only the relative treatment of different kinds of income and the mechanisms for handling income that depends on something happening over more years than those over which it is actually realized) – it is undesirable to systematically provide favorable tax treatment to kinds of income disproportionately concentrated in the super-rich rather than taxing all income as income.
- greenail 5y ago
  Do you think lower rates for long term capital gains incentivizes investment? With the current proposal a windfall of inheritance would not be taxed but a unicorn founder would. if the goal is to grow the economy so everyone can see the gains I would think the capital gains incentive makes up for the lack of revenue with economic growth.
  - dragonwriter 5y ago
    > Do you think lower rates for long term capital gains incentivizes investment? I think the degree to which you want to incentivize investment is highly variable over time and a central focus of monetary policy, not something you want to blindly bake into income tax policy, especially in a way which actively exacerbates inequality, when relative deprivation manifestly is a much greater source of disutility in the developed world than absolute deprivation. > With the current proposal a windfall of inheritance would not be taxed but a unicorn founder would. We have an estate tax for windfalls of inheritance; but, yes, I agree that it would be better to abolish estate and gift taxes in favor of taxing those as income to the recipients, too. (As with other income sources, allowing spreading via advance and/or deferred recognition).

dragonwriter 5y ago

> Maybe we should get rid of the payroll taxes? I have, indeed, made that argument before. > The operating assumption underlying all of your arguments is that bigger government is better. No, the operating basis is that – completely independent of either the desired size of government or the desired target tax revenue (you’ll note I’ve not talked about the desirable absolute rates of any taxes, only the relative treatment of different kinds of income and the mechanisms for handling income that depends on something happening over more years than those over which it is actually realized) – it is undesirable to systematically provide favorable tax treatment to kinds of income disproportionately concentrated in the super-rich rather than taxing all income as income.

greenail 5y ago
Do you think lower rates for long term capital gains incentivizes investment? With the current proposal a windfall of inheritance would not be taxed but a unicorn founder would. if the goal is to grow the economy so everyone can see the gains I would think the capital gains incentive makes up for the lack of revenue with economic growth.
- dragonwriter 5y ago
  > Do you think lower rates for long term capital gains incentivizes investment? I think the degree to which you want to incentivize investment is highly variable over time and a central focus of monetary policy, not something you want to blindly bake into income tax policy, especially in a way which actively exacerbates inequality, when relative deprivation manifestly is a much greater source of disutility in the developed world than absolute deprivation. > With the current proposal a windfall of inheritance would not be taxed but a unicorn founder would. We have an estate tax for windfalls of inheritance; but, yes, I agree that it would be better to abolish estate and gift taxes in favor of taxing those as income to the recipients, too. (As with other income sources, allowing spreading via advance and/or deferred recognition).