Matt Levine’s newsletter Money Stuff is always excellent and usually funny. (And the poor man knows I think so.) However, this passage from the August 12th dispatch soberly explains one of the main ways the United States’ political system enforces capitalism:
“Loosely speaking, there are two main kinds of income: income from labor, like salaries, and income from capital, like dividends and capital gains. In the U.S., the former is taxed more heavily than the latter, with a top marginal rate of 39.6 percent on ordinary income, versus 20 percent on capital gains and dividends. There are a number of efficiency and fairness arguments in favor of a lower tax rate on capital gains, but there are also those who suspect that an important reason for the difference is that (1) rich people tend to get more of their income from capital than poor people do, (2) rich people tend to prefer to pay lower taxes, and (3) rich people tend to get their preferred policies enacted.”
I highly recommend subscribing to Matt Levine’s sardonic finance newsletter, Money Stuff. It’s kind of like Today in Tabs for investors instead of media people. And I love this passage from today’s edition, even though it’s not a joke:
“‘Wall Street greed’ has no explanatory power. Everyone — well, everyone charged with financial crimes, anyway — wants more money. Some people want more money to feed their families, some want more money to buy a yacht, some want more money to feed a gambling addiction. There is no clean dividing line, no way to separate ‘Wall Street greed’ from the usual complex of human motivations and worries and failings. If you are looking to punish ‘Wall Street greed,’ while leaving normal self-interest and ‘addiction and mental illness’ alone, you will always be disappointed.”
Of course, “wants more money” is a just a proxy for “wants more freedom and power” — besides, aren’t freedom and power two sides of the same coin? Pun very intended.
Anyway, if you want the amusing bits, I’ve tweeted some of those.