But as “The Spirit Level” shows, there are other factors than ‘capital’ involved in wealth creation. These include public goods like good public education, electricity, and other infrastructure — as well as epherma like ‘trust’ among social networks.

But there is nevertheless some strange obsession about ‘capital’s role’ in wealth creation, as if ‘capital’ is the sole factor in generating wealth.
But it isn’t.
Which is why the whole hullaballoo around capital gains rates and the fear-mongering about what dire things will befall us all if those rates are lowered is intriguing. What about ‘wealth creation’ do these people not stop to consider…?

I take the fear of lower capital gains rates as a symptom that the financialization of the economy has produced a culture that is now so overwhelmingly obsessed with concentrating, managing, and manipulating ‘capital’ that one explanation for lagging innovation and economic activity may be due to the obsessive attention to ‘capital’ at the neglect of the social and physical infrastructure documented in ‘The Spirit Level’.

Capital Gain/Loss is the money one makes on an investment — house, securities, art, sole proprietorship, that kind of thing. The money you invested in the first place to buy said item was taxed when you earned it. And I believe that is true for corporations as well as people. The difference between what you bought it for and what you sold it for is the Gain/Loss. That money has never been taxed.

Given globalization and changes in business models any data before about 1990 is really irrelevant to this question. Or perhaps 1987 is as far back as we should go.

By taxing long term capital gains at ordinary rates the government would be taxing inflation at ordinary rates – good for the government, bad for investors – a very quiet tax.

Hating on business is easy these days, but you also want business to crate jobs. Hate them or love them?

Or, as the elder Galbraith might have said, the oats don’t even pass through to the road for the sparrows.