I guess this is where politics comes into it, because in general I don't really like the idea of a capital gains tax at a much lower rate than income in the first place.
Completely agree about this part. I find it unethical that capital earns more than labor.
I don’t think that will ever change though, as capital also buys political power (in many countries).
That was my initial motivation for getting into dividend investing: If you can’t beat ‘em, join ‘em.
However, if they're at parity then the incentive is to just squeeze your assets for as much income as possible until you run their value into the ground. Which seems like a pressure for business owners / shareholders to be even more short-sighted than they already are.
Which is also my objection to a wealth tax actually (incentive to tank paper value of all holdings).
IDK. Taxation is sort of a blunt instrument and seems woefully inefficient compared to nationalizing assets on a case-by-case basis.
"Companies often act dumb, and therefore we should charge them less in tax" is not a particularly compelling argument to me.