[SK in CV]

[quote=jstoesz][quote] little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]

This statement is just asinine. Rates change behavior…incentives and disincentives work. Small changes of the tax code are just too hard to tease out of all the other factors that go into the economy

If you tax labor at 100% you will get less labor then if you tax it at 90% and even less than if you tax it at 80% etc.

The same goes passive income and investing. Incentives work.[/quote]

We’ve never had a 100% marginal rate. At that level, I suspect you’re right. Since the middle of the last century, we’ve had marginal rates as high as 91% and for almost all of the last 50 years, the highest rate on earned income was 50% or less. During that period, there has been no empirical evidence that top rate changes, by themselves, either promote or reduce the availablity of capital or labor. Both investors and workers pursue the highest after tax income, regardless of the top marginal rates.

[SK in CV]

[quote=jstoesz][quote] little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]

This statement is just asinine. Rates change behavior…incentives and disincentives work. Small changes of the tax code are just too hard to tease out of all the other factors that go into the economy

If you tax labor at 100% you will get less labor then if you tax it at 90% and even less than if you tax it at 80% etc.

The same goes passive income and investing. Incentives work.[/quote]

We’ve never had a 100% marginal rate. At that level, I suspect you’re right. Since the middle of the last century, we’ve had marginal rates as high as 91% and for almost all of the last 50 years, the highest rate on earned income was 50% or less. During that period, there has been no empirical evidence that top rate changes, by themselves, either promote or reduce the availablity of capital or labor. Both investors and workers pursue the highest after tax income, regardless of the top marginal rates.

[SK in CV]

[quote=jstoesz][quote] little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]

This statement is just asinine. Rates change behavior…incentives and disincentives work. Small changes of the tax code are just too hard to tease out of all the other factors that go into the economy

If you tax labor at 100% you will get less labor then if you tax it at 90% and even less than if you tax it at 80% etc.

The same goes passive income and investing. Incentives work.[/quote]

We’ve never had a 100% marginal rate. At that level, I suspect you’re right. Since the middle of the last century, we’ve had marginal rates as high as 91% and for almost all of the last 50 years, the highest rate on earned income was 50% or less. During that period, there has been no empirical evidence that top rate changes, by themselves, either promote or reduce the availablity of capital or labor. Both investors and workers pursue the highest after tax income, regardless of the top marginal rates.

[SK in CV]

[quote=jstoesz][quote] little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]

This statement is just asinine. Rates change behavior…incentives and disincentives work. Small changes of the tax code are just too hard to tease out of all the other factors that go into the economy

If you tax labor at 100% you will get less labor then if you tax it at 90% and even less than if you tax it at 80% etc.

The same goes passive income and investing. Incentives work.[/quote]

We’ve never had a 100% marginal rate. At that level, I suspect you’re right. Since the middle of the last century, we’ve had marginal rates as high as 91% and for almost all of the last 50 years, the highest rate on earned income was 50% or less. During that period, there has been no empirical evidence that top rate changes, by themselves, either promote or reduce the availablity of capital or labor. Both investors and workers pursue the highest after tax income, regardless of the top marginal rates.

[SK in CV]

[quote=AN][quote=SK in CV]
Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]
Are you sure nobody has suggested such a preference? Here, I’ll help you out:

[quote=CA renter]IMHO, we need to discourage gambling and encourage work. That’s why I would lower the rate on **earned** income, and tax investment income at a much higher rate, with steeply progressive rates.[/quote]
[/quote]

I understand the confusion. It was the other preference you suggested that was straw.

[quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]

[SK in CV]

[quote=AN][quote=SK in CV]
Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]
Are you sure nobody has suggested such a preference? Here, I’ll help you out:

[quote=CA renter]IMHO, we need to discourage gambling and encourage work. That’s why I would lower the rate on **earned** income, and tax investment income at a much higher rate, with steeply progressive rates.[/quote]
[/quote]

I understand the confusion. It was the other preference you suggested that was straw.

[quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]

[SK in CV]

[quote=AN][quote=SK in CV]
Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]
Are you sure nobody has suggested such a preference? Here, I’ll help you out:

[quote=CA renter]IMHO, we need to discourage gambling and encourage work. That’s why I would lower the rate on **earned** income, and tax investment income at a much higher rate, with steeply progressive rates.[/quote]
[/quote]

I understand the confusion. It was the other preference you suggested that was straw.

[quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]

[SK in CV]

[quote=AN][quote=SK in CV]
Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]
Are you sure nobody has suggested such a preference? Here, I’ll help you out:

[quote=CA renter]IMHO, we need to discourage gambling and encourage work. That’s why I would lower the rate on **earned** income, and tax investment income at a much higher rate, with steeply progressive rates.[/quote]
[/quote]

I understand the confusion. It was the other preference you suggested that was straw.

[quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]

[SK in CV]

[quote=AN][quote=SK in CV]
Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.[/quote]
Are you sure nobody has suggested such a preference? Here, I’ll help you out:

[quote=CA renter]IMHO, we need to discourage gambling and encourage work. That’s why I would lower the rate on **earned** income, and tax investment income at a much higher rate, with steeply progressive rates.[/quote]
[/quote]

I understand the confusion. It was the other preference you suggested that was straw.

[quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]

[SK in CV]

[quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]

Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.

[SK in CV]

[quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]

Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.

[SK in CV]

[quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]

Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.

[SK in CV]

[quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]

Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.

[SK in CV]

[quote=AN]So those who prefer active income vs passive income prefer people working till they die vs being able to retire. After all, once you retire, you’re not making active income anymore.[/quote]

Straw man argument. Nobody has suggested such a preference. Historically, the US tax code has provided preferences both for earned and various types of unearned income. With very minor exception there is little empirical evidence that rate changes, by themselves, either promote or reduce the availablity of capital or labor.

[SK in CV]

[quote=jstoesz]
So yes when you buy a Ford share you are giving them your hard earned money which they in turn put to work investing in harder assets…like robots (or perhaps jobs for the robot company). When you only buy one share you are only contributing a small amount, individually insignificant can quickly become collectively significant.[/quote]

No, you’re not giving them a dime. You’re paying someone else who owns a share of Ford a few bucks. Only when Ford issues new shares or sells treasury stock are you providing any capital for robots.

I’m not saying that it’s an inefficient market. Only that the vast majority of invested capital has almost no effect on job creation or business expansion.

[Author]

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