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Earned income taxed twice as heavily as capital gains for some in UK, study finds
(www.theguardian.com)
this post was submitted on 20 Aug 2023
166 points (98.8% liked)
UK Politics
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Easy. Tax them both the same.
That assumes they both have the same societal externalities - I suspect they don't.
I suspect there's a good reason why even fairly left-wing societies (e.g. Sweden, France) tax income at a higher rate than capital gains.
The purpose of tax is not just to internalise externalities.
No, it's primarily to fund spending. But as a rule of thumb, once you've decided how much you'd like the state to spend on things, it makes sense to raise that amount of tax in the way that does the least harm.
Does it help to view it less to do with funding spending and more to do with reclaiming the money that the government has already spent?
Completely agree, it is however much easier said than done.
Doesn’t that also depend on what kind of company has been invested in, and what the job generating the income actually is?