Originally Posted by logtroll
I think it is so incredibly strange that people unquestioningly accept that income from working, which is a matter of trading chunks of one’s life for money, is okay to be taxed, but that income from windfalls (including inheritance) and gains from investments (where the capital, or luck does the work) should be exempted. Shouldn’t it be the other way around?
I couldn't agree more.

In my view, all "income" should be taxed the same. But an exemption for an exchange of labor seems a reasonable policy. A payroll tax, however, also seems reasonable to me, for particular programs like SS and Medicare.

I also think Warren's wealth tax is a reasonable approach, much like the AMT, to capturing income gains that have otherwise gone untaxed. The wealthy have the ability to hide/disguise/defer income "gains" that ordinary citizens do not. (I have no offshore accounts, for example.) That was my bailiwick for some time (estate & financial planning). It's a way of reexamining what a "taxable event" is.

I have never understood (except as a sop to rich donors) what justifies a "capital gains" rate. It's even worse for dividends and inheritance. It's based on a false financial argument and always has been - just like arguments against a progressive tax system. In a tax-neutral economy, people are going to make investments they feel are sound, regardless of tax consequences, and that is how it should be.

Giving tax "incentives" is the worst kind of "market manipulation", yet is favored by so-called "conservatives" all the time. As long as it favors their people.