All posts tagged thomas sowell

→ Thomas Sowell Explains Capital Gains Tax

How are capital gains different from ordinary income?

Ordinary income is usually guaranteed. If you work a certain amount of time, you are legally entitled to the pay that you were offered when you took the job. Capital gains involve risk. They are not guaranteed. You can invest your money and lose it all. Moreover, the year when you receive capital gains may not be the same as the years when they were earned.

If a country wants investors to invest, it cannot tax their resulting capital gains at the same rate as the incomes of people whose incomes were guaranteed in advance when they took the job.

It is really quite simple1.

  1. If you want more of Dr. Sowell’s explanations of economics, I highly recommend Basic Economics (Affiliate Link). 

→ When Doing Nothing is the Better Plan

Thomas Sowell:

History tells a different story. For the first 150 years of this country’s existence, the federal government felt no great need to “do something” when the economy turned down. Over that long span of time, the economic downturns were neither as deep nor as long-lasting as they have been since the federal government decided that it had to “do something” in the wake of the stock-market crash of 1929, which set a new precedent.

I am sure that raising taxes on small businesses and providing huge new entitlements will help things though, right?

→ Paying for the Sins of Our Fathers

Thomas Sowell with a sobering reminder:

It is today’s young people who are going to be left holding the bag when they reach retirement age and discover that all the money they paid in is long gone. It is today’s young people who are going to be dumped over a cliff when they reach retirement age if nothing is done to reform entitlements.

I have always operated under the idea that I will get nothing from Social Security by the time I get to retirement age. The way things are going, that is almost guaranteed to be true.