3 ms·
Haig-Simon income is easy to define in legal and accounting terms, hence its popularity. But it is not what economists would consider the "correct" definition
by yetanotherphd 13y ago
Haig-Simon income is easy to define in legal and accounting terms, hence its popularity. But it is not what economists would consider the "correct" definition of income. I'll quote an article from The Economist which summarizes mainstream opinion quite well:
One of the most basic principles in economics is that the taxation of capital income is inefficient. Taxes on interest, dividends, and capital gains represent a sort of “double taxation”, of wage income.
http://www.economist.com/economics/by-invitation/guest-contributions/proper-tax-rate-capital-income-zero http://www.economist.com/economics/by-invitation/guest-contr...
- rayiner 13y agoYou're conflating two different things. The article you linked to argues that we should only have wage taxes, not income taxes. It does not support the point that capital gains aren't "income." That particular piece also conflates in a hand-wavey way market returns with adjusting for the net present value of future consumption. It's a slight of hand to treat those two discount rates as the same.
- gohrt 13y agoOne of the most basic principles in political science is that economic efficiency is not the only relevant factor in policy decisions.