Reply to Romney Paid 13.9% Tax Rate on $21.6 Million in Income.

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[quote=TheManWithAUsername][quote=Anonymous]Economists would tell you that capital gains deserve a lower tax rate (some would say zero) because it is effectively money that has been double-taxed (i.e., you made your investment with after-tax dollars and then you are taxed again when you realize a gain).

Personally, I disagree with the notion, but that's the policy rationale.[/quote]
Economists would say that? I thought that was just something conservative propagandists say. Since only the return on the investment is getting taxed, that idea is simply wrong. Plus, economists usually avoid statements about justice, and focus on incentives.

I thought that the economists' rational was that we should encourage investment b/c of the multiplicative effect of investment in production capacity. (I'm open to correction, though - I'm no economist.) The problem with that rational is that only a portion of investments have that effect.

Here's a short article on that, by a writer otherwise unknown to me:
http://nontrivialpursuits.org/investment_incentives.htm
[/quote]

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