AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (10 comments)

  1. MacDaddyWatch

    I would guess that a 14% income tax is a higher tax rate t is paid by 75-80% of all income earners.

    And when you tax capital gains, you are also taxing money that has been taxed earlier.

    1. R Richard Schweitzer

      Whilst there are good grounds for eliminating C G taxes, it is not the case that the “money” has been “taxed earlier.”

      Think about it.

      Take a simple case of a piece of land, bought and held, sans income produced.

      Of course there is the tax on gain thatr represents nothing but “inflation” (debased legal tender). So, if there is to be a tax on C G it should be indexed. The “money” is not a constant.

  2. Michael P. Stein

    The same argument applies to sweepstakes and gambling winnings. Both Mr. Spender and Ms. Saver had the same opportunity to buy a winning lottery ticket. So it is likewise entirely fair that Mrs. Gambler, who won $100 million at Powerball, pays not one dime of those winnings for the military that protects her and the other two people in our example.

    1. Erica Claggett

      That’s an interesting point of view, especially considering that lottery winnings are not taxed in Europe – where they are tax happy about everything else.

  3. R Richard Schweitzer

    What seems to be constantly missed in these discussions is the issue of “Public Ownership” of the vast majority of U S business and financial enterprises. True, beneficial ownership is often indirect, via funds, ETFs, etc.; but, a lot is direct.

    Has that beneficial ownership and the motivations to attain it been beneficial to the structure of the U S economy – is it still beneficial?

    If it is beneficial should constraints be placed on the benefits to those ultimate owners by taxation or otherwise?

    Do the benefits to the economy from “Public Ownership” deserve precedence over considerations of “fairness” or “equality?”

    Does taxation on the accrued values of beneficial ownership impede transfers amongst the “public ownership” that lowers the benefits of ownership and decreases public participation?

    Do we want the least possible strictures and deprecation of public ownership; or have we reached a point the public ownership no longer provides essential value to the structure of the U S economy?

  4. Ability to delay gratification is one sign of maturity. I consider it in the interest of society to encourage maturity. (An early example may be found in the book of Genesis, Chapter 41.)

  5. Arnold Ziffel
  6. This makes no sense to me at all. Suppose Ms. Saver chose to spend Saturdays working a second job instead of going to the mall and spending what she made during the week. Under your logic, the extra $10 she earned working on Saturday should not be taxed, because after all she and Mr. Spender had “identical opportunities” and she shouldn’t be “punished” for a choice she made.

    1. No Glen, under this logic that would be another $10 in INCOME FROM WAGES and would be taxed at 20% Like other INCOME FROM WAGES. This simply means that Ms Saver is working more, and earning more, to get ahead more. And Ms. Spender could have worked extra as well but opted to take more time off. So the opportunity is the same, the action is different.

  7. David & Anne Hyndman

    There is NO tax that I am aware of on LOTTO winnings in Canada. Are they crazy ? They seem to be doing just fine.

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