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Comment by polyfractal | Hacker News Reader

> You will experience this as the harder you work the more money you are obligated to give to the government.

This is not really true. There are many ways to make money without expending much effort. Example: capital gains. By simply having a lot of money, I can invest this and make a solid profit...and be taxed in a lower bracket.

It has no bearing on effort expended. In fact, you can easily argue that "More Effort = More Money" has a very definite ceiling which you can't cross. At some point, you have to start leveraging other assets (money, employees, etc).

Taxing based on the amount of income earned is really the only sensible way to tax. You can't tax "effort"

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I don't disagree with your thesis that earned income is a reasonable basis for taxation, it is certainly better than 'value added.'

But wonder if you are arguing that earning money through non-manual labor is 'effortless' ?

This could use some clarification:

" By simply having a lot of money, I can invest this and make a solid profit...and be taxed in a lower bracket."

Is there some magic money pool somewhere that I can put a million dollars into and count on it to make a "solid profit" ? What is a 'solid profit' ? Is it inflation + 4%? 5%? 10%?

People have told me that programming takes no effort, they say "Oh yeah, you just go in there and type in some stuff and make a word processor or something and then sell that again and again for $100, its like printing your own money!" I realize that they don't understand what programming involves in terms of making a living at it.

For the last 15 years or so I've had the opportunity to manage the funds that I rolled over from a 401K as a 'self managed IRA'. I haven't found making that money 'grow' either easy or effortless. Rather it has been very much a challenge.

During the dot-com frenzy I knew people who mortgaged their houses to raise capital that they were going to 'make money hand over fist' with. But I don't know any of them where that turned out to be the best use of that capital. Not definitive I know but it made me cautious.

It takes effort to make a solid profit from investing, but more than that, it takes effort to avoid losses.

That's one of the reasons wages and investment are treated differently: your effort can be wasted in either case, but with investment you can also lose your capital.

Largely true, with the exception of the banks lucky enough to be a Primary dealer for the Federal Reserve, for whom the Fed is indeed your magic money pool.

In regards to investing, nearly everyone is best off just investing in an index fund of the entire market.

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