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Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ
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Why a High Tax Rate on Capital Gains?

05 August 2013 | Pago Pago, American Samoa
Kimball Corson
Why a High Tax Rate on Capital Gains?

Capital gains are almost always and entirely unearned income, once the underlying asset prices are adjusted for inflation and productivity increases providing additional real value are subtracted out. By unearned income, I mean money gotten not from one's own productive labor used to provided a generally useful service or a commodity to or for someone else. Most capital gains derive from speculative, rent seeking behavior that does the economy no good and mostly just lines the pockets of the rich and the oligarchy who are experts as seeking out rents and such gains and who work less than many, if not most.

A 90 percent inflation and productivity adjusted capital gains tax on the class of unearned income I describe would shut that and all other kinds of speculation and much rent seeking behavior down almost immediately, including in commodities, stocks, bonds, etc, yet, at the same time, leave room for up to 10 percent in real growth, where the concept applies.

Income would have to be earned the old fashion way, by actual physical and mental labor, instead of positional, financial opportunism. It would seriously minimize land and credit business cycles and it would largely take the lottery element out of the American economy, along with much "blue sky" now present in financial, commodity and real estate markets.

Would innovation be compromised is a question asked. I think not. Here is why. True innovation yields hard tangible results of actual worth. Bogus innovation yields air. The return necessary to induce sound investment need not have a big speculative component in it if the investment is a good one and the innovation does what it purports to in the way claimed. Risk from idea to innovation can be compensated for by venture capital or seed money getting a higher interest rate on loans and more shares at book value if a stock position is taken instead. An increase in book value per share if real innovation is realized ought not to be taxable as capital gain for it is not unearned income but true value added.

Many want and aggressively seek capital gains, so the notion would not be a popular one. Opportunists would be compromised; so would lottery players. All would have to do more productive work or suffer a loss of income. Now how bad could that be?
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Vessel Name: Altaira
Vessel Make/Model: A Fair Weather Mariner 39 is a fast (PHRF 132), heavily ballasted (43%), high-aspect (6:1), stiff, comfortable, offshore performance cruiser by Bob Perry that goes to wind well (30 deg w/ good headway) and is also good up and down the Beaufort scale.
Hailing Port: Lake Pleasant, AZ
Crew: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
About:
Kimball Corson: I am a 75 year old solo sailor, by choice. However, I did take on a personable, but high maintenance female kitten, now a full grown cat, named KiKiPoo when she is sweet, or KatKatPo after she has just killed something like a bird or bat. [...]
Extra:
Although I was a lawyer and practiced law with good success for thirty years, creating significant new law, I never really believed in the law, the politics of law or in the over reaching self-interest of most lawyers I met. Too much exposure to Nietzsche and other good and seriously thoughtful [...]
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Profile

Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ