Wednesday, March 28, 2007

Why capital should be taxed less than the secretary's income

"In this country, returns to labor are taxed at a higher rate and more consistently than are returns to capital. Warren Buffet has pointed out how his dividend income is taxed at a lower rate than his secretary’s income; this doesn’t strike him as fair. "

I agree on a lot of what you say.
But I do not agree on the fact that inheritance and capital incomes should be taxed as the secretary's salary.
The inheritance comes from money which is supposed to be saved by parents and on which they are supposed to have already paid taxes (if they didn't is another matter, you do not make laws on what could be, but on what you suppose it is)and taxing more the capital interest produces exactly what you are highlighting: that nobody wants to be an entrepreneur anymore.
Why saving and risking your money to actually pay again on it?
It's easier an eight hours a day job with paid holydays and pension...
The ones who decides about economical strategies have to keep this in mind: the consequences of what they do...
Do they want people to invest and to build new businesses? So, they have to help and encourage them, low taxes can be a good way...
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