Make elites compete: Why the 1% earn so much and what to do about it
Taxing capital is about the worst, most destructive tax policy you can have.<p>1- Capital is the main driver of productivity, and productivity is the only long-term way to increase the standard of living.<p>2- Capital is very mobile. Static analysis of taxation doesn&#x27;t just fail, it fails miserably. It can move offshore. It can be structured so that its gains are realized in years or ways that avoid taxes.<p>3- Taxes on capital affect everybody, not just who they are intended to affect. If you want to tax those with very high incomes, directly tax those with very high incomes. Remember, ALL taxes are paid for by people by definition. A corporation doesn&#x27;t really pay taxes, but shareholders take a hit in the form of a lower stock price and lower dividends, employees take a hit in lower pay, the jobless who would have worked there aren&#x27;t hired, the suppliers take a hit in less production, and the customers take a hit in higher prices. Most people hurt are those that aren&#x27;t the 1%.<p>The US has one of the highest marginal tax rates on capital, and it has only exasperated the problem because capital is what improves the lives of those at the bottom. Tax it, and the wealthy will find ways to shield themselves, but those who can&#x27;t afford sophisticated tax strategies will be hurt the most.<p>STOP TAXING CAPITAL. The single best thing the US could do to raise the standard of living for everybody is to entirely eliminate all corporate and capital gains taxes. They collect so little money for the damage they do, and when you count in the cost of enforcement, they barely pull in their cost.