Thread by @tomaspueyo

Lots of bad takes on Biden's proposed tax hike. I must be missing something. What is it?

1. Why do we need to increase taxes if we can print money?
➡️ Too much cash causes inflation. Take some of that cash out of the system through taxes. + tools, + precision on outcomes

2. If you print $ to increase capital gains and then tax them, ppl are worse off
A: You have $100 in stock, appreciates 7% in a year, 0% inflation, 20% capital gains tax➡️$105.6 at the end of the year
B: $100, 40% appreciation, 5% inflation, 40% capital gains tax➡️$118

3. It will disincentivize investments.
➡️What's these ppl's alternative?

Spending? That would be better for the economy. The savings rate of the top brackets is through the roof.

Capital flight? US income taxes are charged on global income, can't escape these like a business

Hiding capital gains abroad? Harder than before, with the tax info sharing agreements with other govs from the last 10-20 years

Investing in foreign companies vs. US-based? This doesn't incentive that at all. Business taxes are not proposed to change

4. Yeah but the Laffer Curve suggests maybe this might reduce overall taxation $
Or maybe not. We don't know. No good empirical data on this. I don't see a pathway for that right now (see pt 3).

And then there's the positives.

5. How does it make sense to have wages taxed at a higher rate than capital gains? You want to incentivize work. It should be at most equal. The only reason why it wasn't is because it was harder to tax capital gains & avoid flight/evasion. Before

6. It's only for families with >$400k in income, which have had one of the best years ever in the stock market, just out of sheer luck + gov handouts (money printing). Narrow minority of Americans.

I'm sure I'm missing lots of aspects to it. What am I missing?