Yes, I’m still distracted (and under deadlines), but this is too good to pass up.
There is no need to encourage risk-taking entrepreneurship with special tax breaks. Risk takers will take risks, and if the risks work out they shouldn’t mind paying the same level of taxes as everyone else. If the risks don’t work out, they won’t have to.
I agree completely with Kinsley, but am surprised that Mankiw does as well, especially as Kinsley correctly presents the issue in the process of another of his pox-on-Obama’s-house conclusions:
Obama…proposes exempting the sale of small businesses from the capital gains tax, allowing small businesses to avoid the burdens his health care plan would place on big businesses, and so on.
Michael Kinsley has argued that small businesses should pay capital gains taxes, and that they “shouldn’t mind paying the same level of taxes as everyone else.” By extension, the preferential rate for capital gains should be eliminated.
It’s nice to see that Greg Mankiw calls this “Wisdom.”