Re: novel argument against taxing rents


"Les Cargill" <lNOcargill@xxxxxxxxxxx> wrote

But that goes back to the old question - what is earned
and what is unearned? That question seems resistant to
objectification.


Defining what is "earned" is a mug's game. Tony Soprano and his crew
consider the money they steal and extort to be "earned".

The only reason we care about dividing incomes into "earned" and "unearned"
is because we foolishly allow our government to _tax_ them differently. The
standard theory is that taxing returns to capital at the same rate as wages
would inhibit capital investment. But is that assumption correct? If
correct, does it in any sense _optimize_ capital investment?

It surely does not _maximize_ capital investment. Cap gains tax cuts do not
seem to have done a bit of good for the savings rate of the US. We are the
world's biggest debtor. In the aggregate, and on net, we are _not_
investing, because we are not saving. Does anybody here believe that if we
eliminate cap gains tax altogether we will reverse the trend toward
_dis_saving?

-- TP


.

Relevant Pages

  • Re: novel argument against taxing rents
    ... Organized crime in general evolved as a reaction to the absence of legitimate government, so they're more or less justified in the ... does it in any sense _optimize_ capital investment? ... It's become 100% about varying techniques of leverage, and I'm hard pressed to say that doesn't work better - until you need the savings to bridge a span of time. ... A tight money supply is a lousy way to regulate human behavior. ...
    (sci.econ)
  • Re: The Euro at $1.55
    ... Nobody, but nobody with any intelligence thinks it is anything other than ... I don't think anyone's making that kind of money. ... The people who seem to be making large amounts also seem to be investing ... I'd love to know what the return on their capital investment is. ...
    (rec.travel.europe)