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View Diary: Republican Tax Math Doesn't Add Up (30 comments)

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  •  Use the definition of "capital" that we use in the (1+ / 0-)
    Recommended by:
    MPociask

    economics profession: Final goods used to produce other goods. Only tax as capital gains the  return on investment (which is defined as 'buying resources - in this case, capital goods.)
       So, the extra money you earn from buying equipment or hiring labor would be taxed as capital gains. Or, on the mass scale, income on dividends from shares of stock you own would be taxed as capital gains. Income from selling stock would be treated like gambling income - IOW, subject to the income tax.

    Or, we could tax all income at the same rate, but discount capital gains by the CPI - IOW, discount the sale price by the inflation that occurred since the date of purchase.
    Long term "investors" would be protected from an "inflation tax," while the quick turnover speculators would pay the full income tax rate.
     

    •  I like this idea. (0+ / 0-)

      The problem is getting people to adhere to one specific definition. Much like the scientific definition of "theory" vs the vernacular definition - without starting with the same definition, the conversation can't go anywhere. But having multiple definitions we're back to the "What do you want it to be?" line.

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