In response to:

On Death Tax, the U.S. Is Worse than Greece, Worse than France, and Even Worse than Venezuela

Ned6 Wrote: Jul 30, 2012 2:06 PM
VAT, FairTax, and taxes on earned income and profits are all taxes on consumption (see below). Since there can be no capitalism without capital, taxes on capital/investment at all stages must be avoided. However, citizens (through the legislators they elected) demand the level of government that must be paid for. It is critical that we minimize the size of government, since that expense must be paid through taxation, borrowing, or inflated currency. Focusing on taxation alone misses the big picture, but it is important to avoid mal-incentives created by misguided tax policy.

Considering that every economic theory agrees that living standards and worker compensation are closely correlated with the amount of capital in an economy (this picture is a compelling illustration of the relationship), one would think that politicians – particularly those who say they want to improve wages – would be very anxious not to create tax penalties on saving and investment.

Yet the United States imposes very harsh tax burdens on capital formation, largely thanks to multiple layers of tax on income that is saved and invested.

But we compound the damage with very high tax rates, including the...

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