Thursday, January 3, 2013

Replace bad taxes with useful taxes

Most taxes are a regrettable (but often necessary) drain on the economy; some (e.g. cigarette taxes) have a good side in that they discourage activities we don't like.  Here are three that we should add at a national level:
  1. A financial transaction tax (aka Robin Hood tax).  This will discourage computer-controlled arbitrage, making things more fair for the small investor and avoiding runaways and it may just save us from take-over by an evil AI.  Please join the Facebook support group.
  2. A carbon tax.  Since energy is at the base of most economic activity, this will dampen the economy, but not more so than an income tax, and it's by far the most efficient way to deal with global warming (by making energy efficiency and non-carbon-emitting energy alternatives more viable).
  3. Tax income from hedge funds and private equity firms at the normal rate, instead of the (much lower) capital gains rate.