TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, November 4, 2012

Two Stories of Taxation of Capital

Erik Nelson (J.D. 2012, Lewis & Clark), Comment, Two Stories of Taxation of Capital, 16 Lewis & Clark L. Rev. 1049 (2012):

The discussion on whether and to what to degree to tax wealth and capital in the United States is as old as the country itself. This Comment analyzes the debate and its history through the lenses of two different general theories of property. The first is a Lockean ideal of the sanctity of private property and capital. The second focuses on the role of the community in the creation of capital and the ramifications that it has for taxation. Both stories can be traced from the very beginning of income taxation in the United States to current debates on capital gains and wealth transfer taxes. Through this Comment, I seek to better understand these theories and, through them, better understand the debates on taxation of capital in which they are used.

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A fairly balanced paper but on pages 1058-1059 the author states that today's "rates not actually being very progressive at all". This statement doesn't seem to hold water when you look at the tax receipts by income class. Indeed almost 1/2 of the population pays no federal income tax while the top 1% pays almost 37% of the total. If this is "not very progressive at all", I would hate to see the author's view of really progressive rates.

Posted by: axelhose | Nov 5, 2012 3:40:47 AM

Because it's not about % of taxes paid, it's about % of income paid to taxes. Many times higher incomes pay less % of their income than lower incomes. Hence, it's "not very progressive at all."

Posted by: Bernie | Dec 13, 2012 6:43:16 PM