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Comment by jcampbell1 | Hacker News Reader

Your cure is worse than the disease. Who really cares whether they work in Geneva or New York or Sydney or SF? They are all nice places to live, and that plan would be a national disaster.

The US just needs to tax capital gains as ordinary income, and cut the corporate income tax to 10-15% with no exceptions to be globally competitive. The goal is to have more multi-nationals based in the US, not less.

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And tax unrealized gains, to eliminate a loophole that benefits folks who are rich enough to avoid realization.

And to smooth the progressive tax rate over multiple years, avoid punishing the entrepreneur and employees who toil for 5 years to earn one big pay day.

Taxing capital gains as normal income would also have a positive effect on the serious problem that 70% of US companies don't pay dividends, which is really missing the whole point of making capital allocation more efficient.

The US just needs to tax capital gains as ordinary income, and cut the corporate income tax to 10-15% with no exceptions to be globally competitive.

This only makes sense if the income used to buy the capital hasn't already been taxed once, when it was earned. Since it already was, you're in effect arguing for double taxation. Which is why capital gains are taxed differently in the first place.

The capital was taxed at ordinary income, yes, but the capital gains was not.

He's right, it's time to start treating capital gains as ordinary income. My fifty dollars of capital generated by fixing a bug at work is equal to your fifty dollars of capital generated by the time/risk value of money.

If anything, I would tax capital gains at 30%-40% while taxing ordinary income at 15%. Actual labor has more utility than raw capital.

Taxing appreciation in the value of stock isn't double-taxation. It's like taxing the appreciation in the value of your house.

Taxing dividends can be double taxation, but isn't necessarily.

Are you aware that sales tax exists, excise tax exists, and that these taxes, along with income tax, are taxes on transfers, not creation? This isn't double taxation, it's n taxation. Money is taxed as it circulates.

I actually got the idea right (taxing capital gains as ordinary income is a bad idea) and some of the reasoning wrong: http://marginalrevolution.com/marginalrevolution/2012/02/div... :

President Obama wants to tax dividends at ordinary income rates. These results, from Marcus and Martin Jacob, should not come as a huge surprise:

    We compile a comprehensive international dividend and capital gains tax data set to study tax explanations of corporate payouts for a panel of 6,416 firms from 25 countries for 1990-2008. We find robust evidence that the tax penalty on dividends versus capital gains is statistically significant and negatively related to firms’ propensity to pay dividends, initiate such payments, and the amount of dividends paid. Our analysis further reveals that an increase in the dividend tax penalty raises firms’ likelihood to repurchase shares, initiate such repurchases, and the amount of shares repurchased. This is strong confirming evidence that when listed industrial firms globally design their payout policies, they take into careful consideration the relative tax implications of their payout choices.*

The US corporate income tax rate is irrelevant to companies like GE that pay no US corporate income taxes.

GE has and will pay large amounts of corporate income tax. GE paid no corporate income tax in 2010 due to a variety of special situations (including the 2008 meltdown of their finance business), and it was widely reported in the news. Since more normal tax years don't make the news, this has led many people like yourself to erroneously think some corporations don't pay income taxes.

Here are some graphs of US Corporate taxes as percentages of profit, GDP, and pretax profit for the last 60 years.
http://blogs.reuters.com/felix-salmon/2011/11/17/charts-of-t...
I'm sure GE has paid some taxes some years, and the graphs must also include firms that lost money, but still, the percentages are very, very small.

Not necessarily true. Large companies can and do currently benefit from higher corporate tax and a complicated tax code. It creates barriers to entry for new companies competing in their market. If you make the tax code simpler it provides them less opportunities to specialize in avoiding taxes.

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