Oh Gawd. This is like shooting fish in a barrel.
It sure is.
What don't you get about the benefit to labor productivity via the application of invested capital?
I don't get why you value labor less than capital.
It isn't a matter of which is valued more. It is a matter of the economic dynamics associated with each.
A labor pool is a resource. Labor itself is a commodity--something that has a fixed value and is bought and sold. The value of the product produced by labor increase the wealth of the employer and the earnings received increase the wealth of the laborer. Such wealth then becomes a new resource.
The employer takes a risk when he contracts with the laborer. He is risking wages and benefits and time and other resources by speculating that the laborer will produce as much or more product than the cost of the labor. If the laborer produces less, the employer loses on his investment.
Without the employer taking the risk, however, no wealth is generated for anybody.
The investor in stocks, bonds, real estate, like the employer, is also speculating that his investment will increase in value and thus create a capital gain. If it does, he has increased his wealth and those whom he buys his investments from also see their wealth increased. Without the investor taking the risk, property sits unsold, municipalities and other entities are handicapped in being able to efficiently expand their services, and companies are less able to grow and create jobs and more wealth.
It isn't a matter of valuing investors over labor. They are two very different things, and incorporate very different things involving very different economic dynamics. Both are necessary in order for wealth to be created.
Do you value food or water more? Or do you see them as equally necessary to sustain life? And yet you do not expect to pay as much for your water as you do for food. Why? because the process for each is very different.
Fox was arguing that what matters is whether you risk losing money or not when differentiating tax rates between labor and capital.
The investor needs a profit margin in order to be able to responsibly take on the risk. The laborer takes no risk at all. He gets paid whether his employer profits or not.
Are you saying that someone who speculates in art and wine should pay a lower rate of tax than someone who draws a salary?
I don't know if that is what Boedicca is saying, but that is what I am saying. Make it more difficult and risky by lowering the profit for that investor to speculate on that art and wine, and there is likely to be far fewer salaries available to the artist or those guys working in the winefields.
- A laborer who is not paid the wage he is owed has recourse to sue the deadbeat employer. It is a fee for service arrangement. FF has already pointed that out.
So you are contradicting Fox then? Fox said that labor is "safe."
Yes labor is safe from all of the risk assumed by the investor. The laborer gets a guaranteed wage for services rendered via verbal or written contract. An investor has no such guarantee.
- Having the compensation for risking capital be the ability to write off losses is Insanely Stupid - what good does pouring money into guaranteed losing propositions just to game the tax code do for the economy or the investor as opposed to choosing what are better investments?
Its not about guaranteed losing propositions. It is about being compensated for risk capital. Just like if you earn capital gains, you should be taxed on it, if you lose money, you should receive tax credits. Corporations have this too. That's perfectly logical and reasonable. What isn't reasonable is the $3000 limit on losses. It should be much higher.
It really comes down to this. If lowering or removing capital gains taxes frees up property and encourages more investment that results in greater economic activity that results in more and better jobs and benefits, why would you object to that? Who could that possibly hurt? What is the downside to that?
