re: #331 Obdicut

It’s unfair to tax investment income without taking inflation into account. And inefficient. Nobody will invest long-term if you do that. We need long-term investments.

We don’t take inflation income into account today, why should we have to do it earlier?

As to investments…

First, I used overseas bonds as my example because those are some of the most interesting ‘cheats’ out there right now. They’re officially taxed overseas so domestic taxes are waived. (it’s more complex than that, but the simple explanation works for this.)

Second, I’ve become more and more doubtful of the “we have to encourage investment” argument as I’ve studied this issue. Put simply, the poor don’t invest, and the rich like the fact that if you put money in you get more money out even before taxes are applied. That said, I said all expenses, and I would include stock and bond purchases within the US. (Depending on details, overseas investments could also apply. as said, it’s the ‘use to avoid tax’ bit that I’m raising.)

The thing is that because stocks and bonds (and real estate and yachts and…) are all going to be “expenses”, a LOT of money will get tucked away at all levels. That’s the reason for the 50% rate.