Skeeter,
I think there are at least two downsides to taxing people based on assets/investment income instead of consumption or earned income.
1. I think it's in the best long term interests of the economy to have assets in the hands of the people that allocate capital the best. Usually, those that allocate it best, create the most, and then accumulate more of it best as a result.
2. I'll use me for #2. I came from a lower middle class family. I wore "hand me downs" when I was very young, considered an occasional family vacation to the Catskills or Poconos a gift from God (we lived in NYC), and heard arguments about the bills every single month. I had a very good job (until I quit a couple of years ago), but most of my current net worth is the result of saving, investing wisely, living well within my means while others were spending more recklessly enjoying themselves etc... Taxing me for being prudent and working hard on my investments in order to escape some aspects of the life I had as a child would seem like a slap in the face. I think people like myself should be rewarded. Now in reality, I'm not that greedy and don't expect to be rewarded, but I think you should at least see my point. I don't think saving, investing, and growing capital should be punished. |
