WSJ Freelink End Inflation Tax
This should not be a partisan issue, or Rich vs Poor, it is right versus wrong.
With high inflation back, it’s time to complete the Reagan tax reforms that indexed tax rates on income to inflation.
$100K invested in 2000 would, even with no real growth in the businesses, be $171K today. Selling the stock in those businesses now would result in capital gains tax on $71K income that is entirely imaginary.
It is wrong, and should end.
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“It is wrong, and should end.”
Along with the favorable tax rates on Capital gains and dividends.
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Why, those are both second taxes on income.
If we eliminate taxes on corporate income, then taxing them as ordinary income would make sense, But taxing the same income twice is wrong too.
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“But taxing the same income twice is wrong too.”
I do not disagree. I would end corporate income taxes. They do more harm than good by skewing what should be decisions based on economic reality. I know from personal experience that the cost of, say, a corporate boondoggle retreat is discounted by the saved taxes from the “expense.” Not good. All income – whether earned by labor or by investing – should be treated the same in a simplified and progressive tax code.
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Well a flat income tax would be better. and a flat consumption tax even better yet.
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Well a flat income tax would be better. and a flat consumption tax even better yet.
Neither would be better in ANY way than a progressive income tax system.
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Europe seems to do Ok with a far less progressive system than ours.
The problem with our highly progressive system is moral hazard, in the economic sense. More than half our population pays no significant income tax and thus has no skin in the game, to use Obama’s term, on spending paid for by income taxes, thus unrestrained spending.
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We all have skin in the game. I do not buy your explanation for the existence government programs you do not like. It is just another way of expressing your disdain for the working poor and democracy that might empower them.
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It seems to me that every tax subtracts from the production of the normal economy. Accordingly, I’d prefer eliminating capital gains taxes entirely, but if indexing them for inflation is the best we can do, let’s do it.
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Is there something not “normal” about building the roads, policing the streets, teaching the young, etc.?
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There is something not normal about ignoring the opportunity cost of such things.
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There is something very not normal about a tax code that penalizes responsible behavior and rewards the irresponsible.
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And who has such a tax code? Oh, you mean if you are too poor to pay income taxes it follows that you are irresponsible. I get it.
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No, if you are capable of investing for your future and choose not to, that is irresponsible.
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“No, if you are capable of investing for your future and choose not to, that is irresponsible.”
So, you mean everybody, except maybe a few billionaires is “irresponsible.” Every time someone takes their kids to the movies with money that could go into a college fund is “irresponsible.” Riiiight.
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OK you’re arguing just to argue.
My maternal grandfather was poor. He sold men’s shoes on commission and raised vegetables because he had to. But he owned stock in the local bank.
Having some degree of investment is responsible well below the billionaire level. Spending every dime you get and all you can borrow is not.
Our tax system should not give incentives to the latter.
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“Our tax system should not give incentives to the latter.”
It doesn’t. I doubt that even you know what you are referring to. Income from savings and investments are privileged. Duh!
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How is interest on savings privileged?
Why should returns on invested income be taxed at all? The income was already taxed.
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“How is interest on savings privileged?”
There are several government programs that allow you to save without paying taxes on interest.
Uh, why shouldn’t it be taxed? It is income. It does not matter if you produced it with savings or investments.
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