Mike Konczal at the Next New Deal looks at the question: Is Taxing Capital Income Fair?.

The main thing I take away from the article is that the people talking about eliminating the capital gains tax don’t live in the real world and aren’t qualified to be bookkeepers, much less accountants.

Income is income, regardless of how it is earned. NTodd covered Andrew W. Mellon’s argument for taxing capital gains at a higher rate than wages.

Since the question is about fairness, the fairest solution is to not discriminate between earned [wages] and unearned [capital gains] income, but to treat them the exact same way.

I note that in his textbook example Joanathan Gruber neglects to mention that the reason that Ned pays higher taxes than Homer is because Ned had more income.

The problem with consumption taxes is that it isn’t “fair” for a single guy like myself to pay lower taxes than a single mother with a couple of kids to raise. She will obviously be consuming a lot more than I will, and pay higher taxes as a result. Is there anyone who really thinks that that is fair? [Well, other than the 1% and the sociopathic Republicans, of course.]

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