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Comment by winter_blue | Hacker News Reader

> Taxing a corporation takes operating money away from that corporation

You nailed it. We need a system where "corporate taxes" should be entirely at the shareholder level, and corporations should be allowed to propagate tax liabilities all the way to individual shareholders (so that holding entities aren't taxed). Then we should apply a progressive income tax on any capital gains made by shareholders. That would make our the system fair and economically efficient.

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We should apply a progressive income tax on any capital gains, period. They're income. There's no reason why they should be taxed at the rate lower than sweat-of-the-brow income, except to economically advantage the rentier class at the expense of the worker class (since the overall tax bill is the same, you're just shifting money paying for it between these two groups by applying different rates).

I agree that capital gains should be taxed like income except for the fact of inflation. If you hold, say a house for 10 years, and inflation averages 8% a year (remember the 1970's), and then you sell it at the same inflation adjusted value, you will pay a bunch of tax on no real gain. Maybe we could adjust capital gain tax to inflation. This would have added benefit of having a constituency that wants a higher CPI against those who would like to keep it low (for example to keep Social Security payments or other retirement payments from increasing).

Problem is inflation statistics can (and often are) manipulated. Just look at how the government swaps things out of the "inflation basket" when the levels start getting too high. Food, rent, healthcare, college education, etc some of the fastest growing (also unavoidable costs) that are not taken into account for CPI.

Thanks. I would rather have money in the hands of people and companies so that they can do stuff with it. I'm not anti-government, but I believe that people and corporations spend money more effectively for themselves than the government can. We obviously need taxes to fund programs that the free market cannot handle efficiently (healthcare, national parks, national defense, and these are just general categories for rhetorical purposes only).

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