Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (13524)	2/23/2010 7:57:59 AM
From: Lane3	Respond to of 42652

One benefit of taxing investment at a lower rate is that investment is more likely to be reduced, chased off, or seriously distorted by taxes than ordinary income is. I agree that's a factor. But I don't think it's a rationale for having a lower rate for passive income as compared to wages. It's only a factor in determining at what tax rate passive income would produce the best effect. You would look for the sweet spot on the rate continuum where that reduction or distortion would be optimized. I don't see any economic basis for wage income to inform that process. If the economic computation produces a figure that inspires moral outrage among wage earners, then politicians might want to make some adjustments to soothe the savage beast or explain to the savage beast why their outrage is counterproductive and stick with the smart rate. But I don't see it as a legitimate factor in computing the rate.