Reader Ed writes in reply to my earlier post on Will Saletan and capital gains:
You seem to imply that the wages of human labor deserve to be taxed, while the wages of capital do not.
Taxes are the cost of a stable society, are they not? I submit that the capitalist benefits *much* more from the stable society than the laborer.
How about a simpler solution – First, eliminate the corporate tax so it is not double-dipping (Bermuda is doing a good job of accomplishing this already), and Second, eliminate the capital gains exemption (yes, tax capital gains at full tax rates! I pay full tax rates on all of my income, why should a capitalist not?).
First off, Ed — we’re all capitalists in this country. Whether you’re negotiating the sale of your ditch-digging abilities, or negotiating the sale of bonds for your new company, you’re engaging in the same right to contract. So let’s ditch the class warfare crap and look at the facts, shall we?
In my example, you had two investments. One made $50,000, the other lost you $20,000. So your income is $30,000. But without a tax break for the $20,000 you lost, you’ll pay cap gains tax on the full $50,000, even though your income is 40% less.
Is that the “extra” benefit a “capitalist” gains in our system, Ed?
Notice I’m not even bothering to point out that capital gains are, by nature, a double taxation (on income already once “fully” taxed), a hindrance to investment, and a blunt tool used to make people feel guilty about providing jobs and opportunities.
And, Ed, just because taxes are the price we pay to live in civilization, doesn’t mean that more taxes make us more civilized. Quite the opposite. Jefferson said that a “wise and frugal government” shall restrain men from injuring each other, but leave them otherwise free to their own pursuits.
Frankly, that doesn’t cost very much. So get your greedy little hands out of my wallet. And if you can’t do that, then at least try not to be so smug about your support of legalized theft.