Thread: Tax the rich!
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Old 10-18-2019, 02:25 PM
k9bfriender is offline
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Join Date: Jul 2013
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Quote:
Originally Posted by Omar Little View Post
Why is it that investment capital is do disregarded?

Without the capital invested in those appreciating, dividend producing assets, there would be no jobs that those companies create, no products that society consumes or enjoys, and no corporate income taxes paid on the income that those companies' generate.

Do you believe that all companies should be ESOP's? If people can't even pony up money for 401k contributions, where do you think the capital will come from to invest in companies?
Much of that is not "investment capital", but simply an investment.

If I invest in a small growing company, that's investment capital. I have taken a big risk, and the reward should be relative.

If I invest in a blue chip, then I do so with the expectation that that's just going to make me money, that's just an investment.

People still seem to be acting in a supply side mentality, even though it has been shown over and over that trickle down is invalid as an economic theory. We have a consumer driven economy. Companies will not invest in more production if there is not demand for it, no matter the tax breaks you give them. Companies will not hire workers if there is no demand for the goods and services that they create, no matter how subsidized. Companies make investments in labor and capital when, and only when, they see that there will be more demand for their product than what can be produced with their existing resources.

I think it was in this thread or maybe another that someone was complaining that a tax on trades would make high frequency trading no longer viable. I see that as a feature, not a bug. High frequency trades do not add anything to the economy, in fact, they siphon off money that could be used for actual investment capital, and increase the volatility and risk of bubbles. If you place an order to purchase 100 shares of Widget's Inc., and someone sees that you have posted that order, and because they have software that sees these trades faster than they are executed, it buys up the lot that you were going to buy, and then sells it to you for a slightly higher price, what value have they added? In cases like those, where their profit comes directly at the expense of the economy, what sense does it make to reward and encourage them to make more money?