<story><title>Taxation of Carried Interest</title><url>https://avc.com/2018/06/taxation-of-carried-interest/</url></story><parent_chain></parent_chain><comment><author>beat</author><text>The correct solution to this problem is to abolish the distinction between capital gains and ordinary income (ie wages), and abolish the corporate income tax that justifies the &amp;quot;double taxation&amp;quot; argument that justifies the capital gains rate.&lt;p&gt;Capital gains is why Mitt Romney can make 200 times as much as I do in a year, and pay half my effective tax rate. This is broad across the economy. It&amp;#x27;s a fundamentally immoral tax model. Moreover, it&amp;#x27;s a socially dangerous one - the idea that there is one set of rules for the rich and another for everyone else is already stressing our nation. Stop actually proving the point, lest you want a revolution to deal with it when society lacks the nerve.&lt;p&gt;Corporate income tax is no big loss. For one thing, it&amp;#x27;s an increasingly shrinking part of our tax base. For another, it&amp;#x27;s riddled with loopholes and borderline graft, much more so than individual taxes. This kind of stuff is biased against entrepreneurship, in favor of cozy relationships with politicians. Being connected is more important than being hardworking or imaginative.&lt;p&gt;Tax capital gains as ordinary income. It&amp;#x27;s simple and fair.</text></comment>
<story><title>Taxation of Carried Interest</title><url>https://avc.com/2018/06/taxation-of-carried-interest/</url></story><parent_chain></parent_chain><comment><author>millstone</author><text>What is the modern argument for preferential tax treatment of capital gains?&lt;p&gt;Arguments against it seem compelling to me:&lt;p&gt;1. The American dream is achievement through hard work. But taxation of capital gains privileges ownership over labor. That&amp;#x27;s just un-American.&lt;p&gt;2. This preferential taxation creates an anti-productive industry dedicated to re-casting ordinary income as capital gains, leading to misallocation of resources.&lt;p&gt;3. Many states including California tax capital gains at the same rate as ordinary income; CA is not exactly suffering from lack of investment income.&lt;p&gt;4. Optics are terrible: I and many other ordinary Americans pay a higher average tax rate than the very wealthy, including ex-presidential candidate Mitt Romney and in all likelihood President Trump.</text></comment>