Profit and inflation are necessary for encouraging people to be innovative and entrepreneurial.
Rent seeking is what we should minimize.
SF stupidviosors and some Californian liberals are the worst of the worst rent seekers. They seek rent and don’t care of hurting the economy. They make numerous regulations to slow productivity for the sole benefit of rent seeking.
Bridge toll is the classic rent seeking.
Planning department and high fees for planning and building permits is another.
Nymbism is also a bad rent seeking.
Requirement on BMR housing is a rent seeking.
Rent control is the worst rent seeking.
Is the stock traders rent seekers?
“The classic example of rent-seeking, according to Robert Shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is not adding value in any way, directly or indirectly, except for himself. All he is doing is finding a way to make money from something that used to be free.[5]”
My point was 0 cap gains is a pipe dream
Once a tax is set up, it is nearly impossible to get rid of. Bay bridge tolls is a classic example.
However, inflation indexing is common in tax code. It would be supported by Wall Street elitists and Democratic elites as well. They will just quietly pass it in tax2.0. This will stimulate investment in business and housing, it can turbo charge the economy. Need to buy some stocks and houses when this passes.
CNBC was talking about inflation indexing last year.
Should we inflation-index all assets and income?
Can we assume asset appreciation = general inflation + specific asset class appreciation?
Is it fair to tax specific asset class appreciation? Why not further distill to specific asset class appreciation = specific asset class inflation + specific asset appreciation?
Income is always inflation indexed by default, even the rent control has an inflation index. Worker’s pay is the main driver for inflation.
Most of tax deduction is inflation indexed. It’s only the general inflation, not appreciation of specific asset class. Nobody’s asking a different inflation adjusted tax deduction for software engineers and coal miners even though their income growth is different. Also nobody is asking a different deduction for social media companies and grocery stores when grocery store income grows slowly.
It’s a very simple, not complicated.
Most deductions aren’t indexed. That’s why congress had to keep passing AMT bandaids. They don’t index tax brackets to inflation either. It’s only recently the FICA max got indexed.
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