Perhaps the capital gains rate should be raised to make buybacks equally attractive, tax-wise, to dividends. Perhaps it would spur investment over paydays.
Perhaps the capital gains rate should be raised to make buybacks equally attractive, tax-wise, to dividends. Perhaps it would spur investment over paydays.
I'd prefer to target whichever factor correlates best with how much the person can afford to pay. A capital gains tax is bad by this analysis, because it also hits the retirement accounts of poorer folk. An income tax increase for high incomes would only affect the rich.
The main reason I would increase the capital gains rate is the very richest, like Warren Buffet (as he himself pointed out), pay a lower rate than much less wealthy/lower income people due to the favorable capital gains rate. This sort of inversion shouldn't exist in a progressive tax system. Personally I view one of the several valid goals of a tax system to be keeping income/wealth inequality within reasonable limits and I think this would help with that.