Taxing investments more than standard labor should be the baseline. Us workers should not be subsidizing the significantly discounted rate that investment earning are taxed at.
If you raise taxes on capital gains you'll get less investment. Maybe that's a good thing.
Either way, I'm in favor of tax simplification in all of its forms; Tax law is like that spaghetti legacy codebase that is just dying for a refactor/rewrite.
What else would those with capital do other than invest? That is, it seems like investment is clearly better than holding cash, regardless of the tax rate (with some caveats, e.g. not being in a deflationary economic state).
It also stifles innovation and messes up pensioners as their income is based on gilt yields.
Their strategy selection would equalize to being about what it is now but each cycle would yield them less money to reinvest and yield the government more money to invest. It can be your opinion that private investors are more efficient than the government but funding our "necessary services" (i.e. having an army, what not) is so deprived of income that it is being extracted through a regressive income tax.
FYI, I'm all for cutting pork, but the income stream and what we end up spending that money on are two different issues.
That's still investing and the idea that higher taxes on capital income would reduce yield targets for capital investments is backwards.
It's a pretty simple issue of a high pressure leaky container, jam a wedge in one leak and the other leaks need to contribute more if you want to maintain the same amount of water coming out. Simplify the tax code and we even end up losing less money to trying to remember where all the leaks are.
In actuality these businesses exist (even much more dirty: in practice, bank employees on occasion demand they be offered this, in trade for not sabotaging a loan. This is pretty common practice). But even "fairly", with actual investments, these businesses exist.
And no, this is not illegal, nor do you want to make this illegal.
Even that doesn't help because "taxed" in this case is a big word for "taken out of what the company pays the person". Which means the company pays in situations where the person controls the company, for obvious reasons.
These sorts of soft benefits should be taxed at their value as their value is being incorporated into the decision to purchase or continue to hold. And, bonus thing, most people at the lower end of the income scale have no access to these soft benefits so excluding them from taxation is a regressive policy.
It'd be nice if everyone came to the realization that the easiest way to exchange a gained/earned asset would be money and then companies just rented out use of a yacht at the market appropriate price. This can cause a bit of craziness for things like "family discounts" but those, again, are discretionary benefits which are being offered to tip the ideal price point, and things of that class come with the added benefit that they usually will fall foul of discrimination laws under any casual examination.
How about the office in which you work ? Should you be taxed on the value of the office building in which you work ? How about the value of the machines ? How about the coffee machine (which you may or may not use) ? How do you intend to check this ?
Even that is the very tip of the iceberg in terms of problems with this policy. Will you be able to catch abuses at the extreme ? Sure. Will you be able to prevent this from becoming a widespread alternative to paying out dividends using policy ? No.
https://www.forbes.com/sites/michaeldurkheimer/2018/03/01/0-...
I don't mean to be harsh but your user name indicates you haven't actually entered the work force yet.
And I have had to chair a meeting of a worker coop when we had to restructure due to running out of capital in the last dot.com crash so I have some idea what I am talking about.