<i>Governments have established that by creating rules and an environment where commerce can take place, they can collect taxes on that commerce.</i><p>This implies that things like dividends should not be taxed, since no commerce occurs. All that happened is a piece of property split into two. Would you favor this outcome? If not, why not?<p>Now personally, I&#x27;m in favor of eliminating all taxes on capital income (and capital, e.g. property taxes). Economically, the best tax is a consumption tax; you live in a home, you pay taxes on the value of living in it. No property tax, no income tax, etc.<p>Potentially such taxes could also be levied at the time of purchase, as they would be with a pair of skis.<p>But that&#x27;s a political non-starter; our western systems of taxation are built around the lie that the rich benefit disproportionately from our society. A consumption tax, which taxes people based on the benefits they receive rather than the value they create for others, would automagically reveal that lie.