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• rayiner 12y ago
  I remember doing that calculation in my tax class, and obviously the logic there is sound given the implicit premise that over a long enough time interval, all saving is just deferred consumption. My nit is: if that's what we're going to do, we might as well just have a consumption tax. The U.S. income tax isn't designed to be a consumption tax, it's designed to be a tax on gains in wealth.
  • harryh 12y ago
    I'm not convinced that the US income tax is really designed at all. I think it mostly just grew out of what was politically feasible.
    • rayiner 12y ago
      Taxing income as opposed to something else was the result of political feasibility, and of course most of the additions to the basic framework don't really have a good rationale. But there is a framework there that has some internal logic to it: https://archive.org/stream/cu31924020062935#page/n7/mode/2up https://archive.org/stream/cu31924020062935#page/n7/mode/2up.