4 ms·
It's totally unfair. Unfortunately, the reality is that capital is highly mobile while labor is not. In an ideal world, capital gains would be taxed much higher
by ajmurmann 3y ago
It's totally unfair. Unfortunately, the reality is that capital is highly mobile while labor is not. In an ideal world, capital gains would be taxed much higher than income from labor. However, is too easy to moved the capital to a place where it's taxed at a lower rate.
- rurp 3y agoA good solution would be a flat tax plus a prebate. Tax all income at 15% regardless of the source, with no tax breaks or exceptions. The first $50k or so is tax free, and that could be handled as a prebate where everyone gets paid (taxRate * floor) by the govt[0]. This would be much more progressive than the current system and vastly simpler to implement and enforce. Looking at the current capital gains rate is actually too rosy, since there are so many loopholes and exceptions that wealthy people can use to bring the rate down. The actual effective tax rate billionaires in the US pay is below 10%. I doubt something like this will ever happen given how many selfish interests would fight against it. It sure would be great though if middle class workers didn't pay a higher tax rate than millionaires. [0] I'm throwing out round numbers but have seen research that backs up figures in this ballpark.