If You Want To Understand Why Taxing Capital Twice Over Is Bad for Workers, this Picture Says a Thousand Words

If You Want To Understand Why Taxing Capital Twice Over Is Bad for Workers, this Picture Says a Thousand Words, by Dan Mitchell.

Capital” here refers to physical capital — the machinery, factory space and office equipment that allows workers to be more productive. A garment worker with a sewing machine produces more blouses per hour than a garment worker with a needle and thread; therefore the garment worker with a sewing machine earns higher wages.

More capital mean higher income

That’s an amazingly powerful relationship. Wages for workers are very much tied to the amount of capital that’s invested. In other words, capitalists are the best friends of workers.

Something to think about with the President proposing big increases in the double taxation of capital gains. And something to consider since he wants America to have the highest level of dividend double taxation in the industrialized world.

hat-tip Matthew