August 2, 2007 by Tom Armstrong.

The Economist on the U.S. corporate tax rate.

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August 2, 2007 by Tom Armstrong.

An opinion in the WSJ today discusses the history of taxing capital gains in America. It’s a good read. Of note, which I had never read before:

The great economist Irving Fisher came up with an analogy that precisely delineates the basic difference between income and capital. Think of a fruit-bearing tree. The tree both grows and yields fruit on an annual basis. The tree is effectively a capital asset, the fruit is the income, and growth of the size of the tree — which will yield more fruit in the future — is like a capital gain.

The fruit can be taxed without hurting the tree or diminishing its capital — its ability to grow and bear more fruit in the future. But taxing a capital gain is like sawing off limbs of the tree. That diminishes its capital value and inhibits the tree’s ability to produce fruit; that is to say, future income.

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