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Because that would incentivize sitting on money, and the economy works better when people spend money.
by BobaFloutist 1y ago
Because that would incentivize sitting on money, and the economy works better when people spend money.
- jedberg 1y agoSo does taxing income, since we don't let people deduct most of their expenses. If you want to make people spend money, you'd implement a wealth tax.
- BobaFloutist 1y agoEvery time we try to institute a wealth tax, billionaires get antsy and start supporting fascism.
- jedberg 1y agoYeah, that's why we don't have one. :)
- pdonis 1y ago> that would incentivize sitting on money No, it would incentivize investing, since if you just leave money sitting under a mattress, it loses buying power over time because of inflation. > the economy works better when people spend money The economy works better when people create wealth through cooperation, specialization, and trade. Taxing production reduces the incentive for people to do that.
- barchar 1y agoInvesting doesn't require people to save money; it causes money to be saved
- pdonis 1y ago> Investing doesn't require people to save money It requires people to not consume; any money that is put towards investment is not put towards consumption.
- BobaFloutist 1y agoBut most things that you invest in are productive too. In general, the better the returns for the investment, the more productive they are (stocks>bonds>banks)
- pdonis 1y ago> most things that you invest in are productive too Sure. But they aren't consumption. The whole point of investing is to forgo consumption now in order to put those resources to use for something else, something that will improve the situation in the future. That's where the returns on the investment come from.