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Politics : PRESIDENT GEORGE W. BUSH
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To: DuckTapeSunroof who wrote (665858)12/30/2004 5:15:19 PM
From: Peter Dierks  Read Replies (1) of 769670
 
"Taxing capital formation is the surest way to stop any economic growth."

Aren't ALL forms of income potentially involved in 'capital formation'?

1) Joe Blow works at Walmart. His paychecks get deposited at the bank. The bank leverages the $$$ in capital markets.

2) Whatever Joe Blow doesn't deposit, he spends. What he spends at retail then gets deposited/retained/re-invested.

The government has no business carving out narrow tax breaks for special sectors / favored investors....

John Small is an investor. He starts a company and sells it five years later at a profit of $1M. The company employees 25 people at good wages. He takes the original investment and the remainder (after tax) and starts a new company. Do you want to limit the number of employees he can hire by taxing away the fruits of his success?

Along the way, he has been funding your welfare state. The less money he has left the smaller his next commitment.

Actually, your point about the paycheck-to-paycheck person does have validity. The economy does better when consumer’s people spend rather than save. Spending snowballs into revenues and profits. The engine of this is the availability of external capital. If the US cannot attract foreign capital, the cycle stops. Foreign capital is attracted by the absence of government intervention. It flees welfare states.

Grandmother Jane's father died in 1905. He left her the bulk of his holdings in a privately held family business. In 1970, the business is worth the same amount after adjusting for inflation. Can taxing the inflation be morally justified?
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