For as long as I’ve been an economics journalist (23 years, more or less), the mainstream view among economists has been that taxing capital—corporate profits, dividends, capital gains, savings and wealth in general—is:
- Counterproductive, because capital investment fuels productivity gains and economic growth, and
- 2. Usually futile, because capital owners have so many ways to avoid taxes and shunt the burden onto others.
The former argument has undeniably lost a little of its oomph in recent years. The influential papers that implied that the optimal rate of capital taxation is zero (Atkinson and Stiglitz, 1976, Judd, 1985, and Chamley...