If you nevertheless believe that the capitalists have been busily rigging the system in their own interest, you’ve got to admit they’ve done a spectacularly bad job of it. How else to explain the quintuple taxation of capital income, where you can invest a dollar that was taxed the day you earned it, then pay corporate income taxes, dividend taxes, capital gains taxes and inheritance taxes on the income it throws off? Surely any concern that the rich are calling the policy shots should melt away in the face of actual policy.
(Please don’t respond that capital gains are taxed at a lower rate than ordinary income. When you tax the same income multiple times, what matters is not any single rate, but the accumulation of *all* the taxes.)
The skinny of Thomas Piketty’s bestseller Capital in the 21st Century is that 5 levels of taxation aren’t enough, so we need a sixth.
Piketty is a bright guy, and is free to make any argument he likes. But why on earth would someone accept that skinny with a straight face?
Oh and … don’t forget … Landsburg is talking about taxes on the flow of income, while Piketty is talking about a new tax on the stock of wealth that generates the flow of income. That’s like ramping up the rates on each of those separate taxes.
Via Carpe Diem.