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"if one agrees that taxing regular personal income makes sense, one should also tax capital income." I don't see this as logical, because agreeing that it make
by jp555 12y ago
"if one agrees that taxing regular personal income makes sense, one should also tax capital income."
I don't see this as logical, because agreeing that it makes sense has nothing to do with whether it's effective or not.
Taxing capital gains reduces the amount that can be allocated into generating new wealth, which may mean lower overall tax income in the long term. I'm not saying we have it right, but that it's really very complicated.
- GFK_of_xmaspast 12y agoNot taxing capital gains does wonders for concentrating wealth on the rich and ultra-rich.
- dragonwriter 12y ago> Taxing capital gains reduces the amount that can be allocated into generating new wealth So does taxing any other form of income. Preferentially low taxes on capital gains favors wealth accumulation by people who already derive income from capital and, at any given present revenue level, relatively disfavors wealth accumulation by people who derive income through means which are more heavily taxed, notably labor income.
- jp555 12y agoI didn't mean to suggest only capital taxes incure opportunity cost, you're right that all taxes do. I have been thinking lately as well that we have probably shifted to taxing labour too heavily, but as it is really complicated, Im sure there's a lot that I don't know that I don't know.
- AnthonyMouse 12y ago> Taxing capital gains reduces the amount that can be allocated into generating new wealth, which may mean lower overall tax income in the long term. This is really true of all taxes. The tax money comes out of someone's pocket and that person may have otherwise invested the money or done some other economically productive thing with it.