The US just needs to tax capital gains as ordinary income, and cut the corporate income tax to 10-15% with no exceptions to be globally competitive.
This only makes sense if the income used to buy the capital hasn't already been taxed once, when it was earned. Since it already was, you're in effect arguing for double taxation. Which is why capital gains are taxed differently in the first place.
The capital was taxed at ordinary income, yes, but the capital gains was not.
He's right, it's time to start treating capital gains as ordinary income. My fifty dollars of capital generated by fixing a bug at work is equal to your fifty dollars of capital generated by the time/risk value of money.
Are you aware that sales tax exists, excise tax exists, and that these taxes, along with income tax, are taxes on transfers, not creation? This isn't double taxation, it's n taxation. Money is taxed as it circulates.
President Obama wants to tax dividends at ordinary income rates. These results, from Marcus and Martin Jacob, should not come as a huge surprise:
We compile a comprehensive international dividend and capital gains tax data set to study tax explanations of corporate payouts for a panel of 6,416 firms from 25 countries for 1990-2008. We find robust evidence that the tax penalty on dividends versus capital gains is statistically significant and negatively related to firms’ propensity to pay dividends, initiate such payments, and the amount of dividends paid. Our analysis further reveals that an increase in the dividend tax penalty raises firms’ likelihood to repurchase shares, initiate such repurchases, and the amount of shares repurchased. This is strong confirming evidence that when listed industrial firms globally design their payout policies, they take into careful consideration the relative tax implications of their payout choices.*
This only makes sense if the income used to buy the capital hasn't already been taxed once, when it was earned. Since it already was, you're in effect arguing for double taxation. Which is why capital gains are taxed differently in the first place.