3 ms·
> replace it with taxes on capital gains The reasons capital gains taxes are lower than income seem sound to me. You want capital formation and savings. There
by rubashov 14y ago
> replace it with taxes on capital gains
The reasons capital gains taxes are lower than income seem sound to me. You want capital formation and savings.
There's only a problem because the government inflates the currency and manipulates interest rates down. This subsidizes speculation. The solution is just higher interest rates.
- rprasad 14y agoThe problem is not that capital gains are taxed at lower rates; the problem is that the rate differential between capital gains and ordinary income is currently too large. It incentivizes fake investment (in speculative investments) rather than savings (ordinary income) or businesses (which earn ordinary income). Higher interest rates will help increase savings, but it will do little to address the incentivization of speculative markets caused by the tax rate differential. The solution is to increase interest rates and reduce the tax rate differential (either by increasing capital gains taxes or lowering income taxes).
- rubashov 14y agoThe successful speculations are predicated on artificially low interest rates and subsidized leverage.
- msellout 14y agoThe amount of savings in the economy is exactly equal to the amount of investment. Changing the capital gains tax rate does not affect how much investment takes place, but instead affects the choice of investment vehicle.