# Do Capital Gains Screw the Poor? **URL:** \ **Category:** Great Debates\ **Created:** [July 5, 2023, 2:37pm UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644 "2023-07-05T14:37:13Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Common\_Tater](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/common_tater/32/13846_2.png) [@Common\_Tater](https://boards.straightdope.com/u/Common_Tater)\ **Post date:** [July 6, 2023, 1:40am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/41 "2023-07-06T01:40:09Z")
> [@Little\_Nemo](#): > > No, that’s not accurate. Income tax was introduced in 1861. It was sold to Americans as a means of funding the war. Yes, it’s accurate. Income tax was later declared unconstitutional by the supreme court. Don’t take my word for it, look it up. It was then later yet declared copacetic, and ratified as an amendment by 1913, or near enough. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [July 6, 2023, 1:48am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/42 "2023-07-06T01:48:19Z")
> [@Common\_Tater](#): > > Yes, it’s accurate… Don’t take my word for it, look it up. Let me guess. I should look it up on “Tax Reform” websites. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [July 6, 2023, 1:51am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/43 "2023-07-06T01:51:25Z")
> [@octopus](#): > > I’m poor relative to Bill Gates, yet one could argue that Microsoft’s ability to product let’s say Excel and sell it for a reasonable price helps me more than the fact that Bill Gates made some billions theoretically hurts me. Microsoft’s ability to prevent other companies from selling products that would compete with Excel is what’s hurting you. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [July 6, 2023, 2:33am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/44 "2023-07-06T02:33:18Z")
> [@Pleonast](#): > > > [@msmith537](#): > > > > You may argue laws should limit what billionaires can buy or sell or set limits on how companies conduct business. But a person is not inherently immoral because the[y] created as successful company. > > (Fixed presumed typos.) > > I’m not arguing laws, but morals. I agree that creating a successful company is not immoral. I am asserting that possessing extreme wealth (which I am calling a billion (that is, a thousand million, present-day, U.S.) dollars) is immoral, regardless of how it was obtained. How so? If someone creates a company like Amazon that grows to $1.3 trillion in value, how much of that wealth should they be “allowed” to keep? ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [July 6, 2023, 3:08am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/45 "2023-07-06T03:08:46Z")
> [@Little\_Nemo](#): > > Let me guess. I should look it up on “Tax Reform” websites. Nope. Just check Wikipedia: [Pollock v. Farmers' Loan & Trust Co. - Wikipedia](https://en.wikipedia.org/wiki/Pollock_v._Farmers%27_Loan_%26_Trust_Co). > _ **Pollock v. Farmers’ Loan & Trust Company** _ , 157 U.S. 429 (1895), affirmed on rehearing, 158 U.S. 601 (1895), was a [landmark case](https://en.wikipedia.org/wiki/Landmark_case) of the [Supreme Court of the United States](https://en.wikipedia.org/wiki/Supreme_Court_of_the_United_States). In a 5-4 decision, the Supreme Court struck down the [income tax](https://en.wikipedia.org/wiki/Income_tax_in_the_United_States) imposed by the [Wilson–Gorman Tariff Act](https://en.wikipedia.org/wiki/Wilson%E2%80%93Gorman_Tariff_Act) for being an unapportioned [direct tax](https://en.wikipedia.org/wiki/Direct_tax). Congress repealed the war-time income tax shortly after the Civil War ended. Then in 1894, the Wilson-Gorman Act introduced a new income tax, as part of a reduction in the tariff. That’s what the Supreme Court struck down in 1895, because it was in breach of Article 1, Section 2, Clause 3, which required that direct taxes be apportioned on the states by population. The income tax didn’t meet that test. The 16th Amendment, passed in 1913, authorised income tax even if it didn’t meet the apportionment requirement. ---
**Author:** ![Pleonast](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pleonast/32/1183_2.png) [@Pleonast](https://boards.straightdope.com/u/Pleonast)\ **Post date:** [July 6, 2023, 4:22am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/46 "2023-07-06T04:22:51Z")
> [@Dr.Strangelove](#): > > > [@Pleonast](#): > > > > I agree that creating a successful company is not immoral. I am asserting that possessing extreme wealth (which I am calling a billion (that is, a thousand million, present-day, U.S.) dollars) is immoral, regardless of how it was obtained. > > How can something be moral and immoral at the same time? A thing, that is moral: creating a successful company. A different thing, that is immoral: having a billion dollars. ---
**Author:** ![Pleonast](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pleonast/32/1183_2.png) [@Pleonast](https://boards.straightdope.com/u/Pleonast)\ **Post date:** [July 6, 2023, 4:25am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/47 "2023-07-06T04:25:34Z")
> [@msmith537](#): > > If someone creates a company like Amazon that grows to $1.3 trillion in value, how much of that wealth should they be “allowed” to keep? How much is being a moral person worth? ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [July 6, 2023, 4:25am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/48 "2023-07-06T04:25:47Z")
> [@Northern\_Piper](#): > > Congress repealed the war-time income tax shortly after the Civil War ended. > > Then in 1894, the Wilson-Gorman Act introduced a new income tax, as part of a reduction in the tariff. That’s what the Supreme Court struck down in 1895, because it was in breach of Article 1, Section 2, Clause 3, which required that direct taxes be apportioned on the states by population. The income tax didn’t meet that test. > > The 16th Amendment, passed in 1913, authorised income tax even if it didn’t meet the apportionment requirement. I’m aware of the history of the income tax. I’m not disputing when it was enacted, repealed, re-enacted, ruled unconstitutional, made constitutional, and re-enacted again. Those are all facts. What I dispute is the claim that _“It was sold to Americans on a decidedly “Stick It To The Rich!” basis, indeed it would have never been accomplished otherwise.”_ ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [July 6, 2023, 4:42am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/49 "2023-07-06T04:42:36Z")
> [@Pleonast](#): > > > [@msmith537](#): > > > > If someone creates a company like Amazon that grows to $1.3 trillion in value, how much of that wealth should they be “allowed” to keep? > > How much is being a moral person worth? Moral according to who? By what measurement (other than your arbitrary one of having too much money)? Moral like employing 1.5 million people? Moral like servicing the needs of over 300 million customers? ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [July 6, 2023, 5:05am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/50 "2023-07-06T05:05:21Z")
> [@Pleonast](#): > > A different thing, that is immoral: having a billion dollars. Having a billion dollars is a necessary consequence of having a sufficiently successful company. Another example: you own a modestly successful medical supplies company with some innovative products. It’s worth $100M. One day, there’s a public health emergency and it turns out that one of your products (which you developed just for this eventuality) is an enormous help. Although you promise not to raise prices, the market nevertheless recognizes that your company is in a very good position and rewards your foresight. The stock shoots up and you are now worth $1B. At what point did you do something immoral? ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [July 6, 2023, 6:12am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/51 "2023-07-06T06:12:24Z")
> [@Pleonast](#): > > How much is being a moral person worth? That and five bucks will get you a cup of coffee. ---
**Author:** ![Crafter\_Man](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/crafter_man/32/458_2.png) [@Crafter\_Man](https://boards.straightdope.com/u/Crafter_Man)\ **Post date:** [July 6, 2023, 9:58am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/52 "2023-07-06T09:58:16Z")
> [@Pleonast](#): > > I am asserting that possessing extreme wealth (which I am calling a billion (that is, a thousand million, present-day, U.S.) dollars) is immoral, regardless of how it was obtained. Our economy is not based on a zero-sum game; if I make a dollar, it doesn’t necessarily mean someone else loses a dollar. Money can be - and often is - _ **created** _. Wealth is often _ **created** _. Creating wealth, in and of itself, doesn’t take anything away from anyone else. If anything, it makes those who are _not_ wealthy richer and more comfortable. With minor exceptions, it’s good for everyone. All arguments against wealth are ultimately rooted in envy. ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [July 6, 2023, 10:41am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/53 "2023-07-06T10:41:28Z")
> [@Crafter\_Man](#): > > Money can be - and often is - _ **created** _. Wealth is often _ **created** _. Creating wealth, in and of itself, doesn’t take anything away from anyone else Money can be - and often is - _ **consolidated** _. Wealth is often _ **consolidated** _. Consolidating wealth, in and of itself, is entirely about taking away from someone else. The question of wealth should center on who gets it when it is created and consolidated. Ownership getting most/all of it is a _choice_. This state is not an immutable law of nature, it is a choice made by society. We’ve all seen the graph, prior to 1980 a large chunk of gains were shared between ownership and workers, post 1980 an increasing portion of gains are held by ownership. This is a choice, and society is not made better by that choice. This is what screws over the poor. The choice we made that directs increasing proportions of wealth towards capital gains rather than paychecks. Capital gains aren’t evil, they’re simply too big. ---
**Author:** ![Mijin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mijin/32/9369_2.png) [@Mijin](https://boards.straightdope.com/u/Mijin)\ **Post date:** [July 6, 2023, 10:48am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/54 "2023-07-06T10:48:06Z")
I very much consider myself a “capitalist” but I also feel that the existence of billionaires implies issues with the markets and society. I’m not saying that there should be zero billionaires, but the number should be very few if taxation is progressive, worker rights and protections are adequate and markets are competitive. ---
**Author:** ![fedman1](https://avatars.discourse-cdn.com/v4/letter/f/e495f1/32.png) [@fedman1](https://boards.straightdope.com/u/fedman1)\ **Post date:** [July 6, 2023, 11:02am UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/55 "2023-07-06T11:02:23Z")
> [@Common\_Tater](#): > > And to be sure the initial rates were quite low - only about 2% I disagree–up till the 50s the US (and Britain) taxed high incomes at about 80% (Nero Wolfe cited this in stories) ---
**Author:** ![Crafter\_Man](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/crafter_man/32/458_2.png) [@Crafter\_Man](https://boards.straightdope.com/u/Crafter_Man)\ **Post date:** [July 6, 2023, 12:02pm UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/56 "2023-07-06T12:02:36Z")
Let’s say I’m living under a bridge, and Bill Gates creates $100M this year. One of the following is true: 1. The creation of the $100M has hurt me. 2. The creation of the $100M has neither helped me nor hurt me. 3. The creation of the $100M has helped me. You seem to be arguing that #1 must be true. I contend that #2 is the “worst” case scenario, and that #3 is most likely. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [July 6, 2023, 12:29pm UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/57 "2023-07-06T12:29:55Z")
> [@Little\_Nemo](#): > > What I dispute is the claim that _“It was sold to Americans on a decidedly “Stick It To The Rich!” basis, indeed it would have never been accomplished otherwise.”_ You’ve said that the income tax was sold to Americans as a war measure. I don’t see how it’s possible to use the rationale for a war income tax, that was repealed after the war ended, as the rationale for a peacetime income tax passed half a century later. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [July 6, 2023, 12:30pm UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/58 "2023-07-06T12:30:11Z")
> [@Crafter\_Man](#): > > Let’s say I’m living under a bridge, and Bill Gates creates $100M this year. You’re starting with the thing you need to prove. Does Bill Gates create wealth? Does he create $100 million worth of it? Maybe he doesn’t create any of it, and it’s the software engineers who work for him who create it: If that’s the case, then the money should go to the software engineers, not to Gates. Maybe neither he nor his employees create wealth, and they just consolidate it from those who are creating it. Maybe, in the process of consolidating, they’re actually destroying wealth. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [July 6, 2023, 12:35pm UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/59 "2023-07-06T12:35:18Z")
Nitpick, but Bill Gates hasn’t run Microsoft in decades and his current net worth is mostly in outside investments. (He’s still worth something like $100 billion.) ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [July 6, 2023, 1:02pm UTC](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644/60 "2023-07-06T13:02:28Z")
> [@Crafter\_Man](#): > > You seem to be arguing that #1 must be true. I can’t figure how you came to that conclusion. My first point is that wealth is often consolidated rather than created. Second point is that we should focus the question of wealth on who gets that wealth when it’s created, owners or workers. Third point is that who gets the wealth is a choice made by society, and our society has chosen owners over workers for the last few decades. I don’t have a problem with Bill Gates owning/operating a company that creates $100M of wealth in a year, I have a problem with him keeping that $100M while ruthlessly negotiating with his workforce on pay, breaking unions, asking the government to hold the line on minimum wage increases, demanding tax benefits or other incentives from local government, and manipulating tax laws so that every penny of that $100M stays in his pocket. [Previous page](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644.md?page=2) [Next page](https://boards.straightdope.com/t/do-capital-gains-screw-the-poor/986644.md?page=4)