Comment by dmos62
Comment by dmos62 a day ago
Is taxing investment absurd?
Comment by dmos62 a day ago
Is taxing investment absurd?
Because we need a low risk system to track whether people are net-contributing or -draining society's resources, otherwise it isn't easy to tell who is creating more wealth so they can be supported. Gold remains the best option after centuries (if not millennia) of experimentation.
Gold is not an investment. It takes otherwise productive capital out of the economy and produces nothing. It's functionally no different than stuffing your money in a mattress.
It has utility though: unlike the dollars in your mattress, it can't be printed into oblivion by your central bank. It is relatively portable, and people have flocked to it as a store of value especially during periods of socioeconomic instability when assets are going down and gov't spending is going up. It's tradeable for fiat in any country, so it allows you to bring value along if you relocate.
Its price reflects that utility and like any modern asset, a lot of speculation. You can speculate on whether it's more or less useful given current events -- nothing wrong with speculating that it is only going to be increasingly useful.
You're right that it has utility, but being fungible doesnt imply that it is automatically an investment.
Speculation is not the same as investment, and it is still completely non-productive.
What is it that you're arguing for then? That there be some entity that gets to decide what is and isn't a productive use of all of our excess money? Who gets to decide what's excess? Who gets to decide what is and isn't a productive use of the money?
How is this any different than buying a house? Buying a house that's already been built is pretty damn close to the same thing as buying gold. No new "work" is being done into the economy, you're just exchanging dollars for an asset that will likely appreciate a bit faster than inflation but less than $SPY.
The person you bought it from can do something else with that money, sure, but that's also true of the other person in your transaction to buy gold.
Maybe you'll say a house has more utility than bars of gold, but all of this at the end of the day, seems to come down to your specific views and judgements of what it means for capital to be used productively. So to circle back to the beginning, what is it you're advocating for here? That because you don't see gold as a low risk hedge against inflation as being "productive" it should face more taxes to incentivize it not happening?
> Buying a house that's already been built is pretty damn close to the same thing as buying gold. No new "work" is being done into the economy, you're just exchanging dollars for an asset that will likely appreciate a bit faster than inflation but less than $SPY.
I mostly agree with you, but I don't think the house comparison is good. Houses require lots of maintenance, and to hold their value (comparable to other houses) they often need remodeling every decade or so. If instead of houses we just said "land" then I think the comparison would hold up more.
No, im not arguing that it should be illegal. Im just saying, as Warren Buffet before me did, that its not an investment.
It relies on the greater fool theory to produce excess returns. It is bad for the economy when money idles in non productive speculative assets.
You either maintain the house for others use and extract rent or live in it. This is productive.
If you are hoarding an unused house we should heavily tax that to make it unreasonable to do so.
In physical metals that don’t generate income or induce further economic activity, I don’t believe so. What good does a hunk of gold sitting in a safe do for the economy?
>What good does a hunk of gold sitting in a safe do for the economy?
Not a whole lot once legal tender certificates can no longer be redeemed for the same amount of metal year after year.
This investment is now taxed more than other types of investment. Is sales tax charged when you buy stock? Should it be?