Ideal Tax Rates on investments

Jul 2014
14,706
8,965
massachusetts
#1
First you need to decide whether you'd like a society where wealth becomes more concentrated every year(like what happened before 1930 and after 1980), or a society where wealth becomes more evenly distributed every year. (NOTE: this doesn't mean everyone has the exact same amount, it means the lower quintiles increase the percentage of the total wealth they control (i.e. like what happened from 1930 to 1980)

There's a simple formula.
Take the average return on investment (I'll use the S&P average for the last 90 years - 9.8%)
take the average growth rate of the economy (say 3% that gets tossed around a lot)

If the after tax ROR exceeds the GDP growth rate, wealth becomes more concentrated.
if the after tax ROR is less than the GDP growth rate wealth becomes more broadly distributed.

That puts the ideal effective tax rate on capital gains at around 70%.

That's not theory, it's arithmetic
 
Jun 2012
41,958
15,178
Barsoom
#2
The tax rate on investments and capital gains should be 10% at the maximum. Always disregard French faux economists.
 
Nov 2012
40,770
11,756
Lebanon, TN
#4
And how do you arrive at that number?

investment is a risk, risk of loosing it all or making it big...

10% tax rate means the Government gets 10% of the return on an investment, the government takes not risk, the investor keeps 90% because they take ALL the risk. The higher the tax rate on a return is an increase in the risk of the investment. We want people to invest in new innovation,

Unless you want your tax dollars to subsidies 100% all innovative ideas.

I rather tax dollars build bridges instead of subsidizing private corporations.
 
Jul 2014
14,706
8,965
massachusetts
#5
investment is a risk, risk of loosing it all or making it big...

10% tax rate means the Government gets 10% of the return on an investment, the government takes not risk, the investor keeps 90% because they take ALL the risk. The higher the tax rate on a return is an increase in the risk of the investment. We want people to invest in new innovation,

Unless you want your tax dollars to subsidies 100% all innovative ideas.

I rather tax dollars build bridges instead of subsidizing private corporations.
Where did you get 10%?
Why is that the magic number?
Is there some religious belief you have that requires you to support transferring wealth from the middle class to the top 0.1%?
 
Nov 2012
40,770
11,756
Lebanon, TN
#7
Where did you get 10%?
Why is that the magic number?
Is there some religious belief you have that requires you to support transferring wealth from the middle class to the top 0.1%?

Fair return for a government they take no risk.. Unless government wants to give a return ABOVE what is invested to the investor government should be happy with 10%
 
Jul 2014
14,706
8,965
massachusetts
#8
Fair return for a government they take no risk.. Unless government wants to give a return ABOVE what is invested to the investor government should be happy with 10%
So how do you pay for the government, do you support higher personal income taxes? A 60% raise in personal income tax rates would balance the budget, is that what you support?
 

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