Capital gains larger share of U.S. income while paying less tax, Michael Pettis notes - Traders Union
Capital gains larger share of U.S. income while paying less tax, Michael Pettis notes - Traders Union
Source: Traders Union
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DW NOTE
Michael Pettis has spent a decade explaining that economies with rising capital shares and falling labour shares eventually face demand crises — consumption can't keep pace with production capacity. The U.S. now taxes capital gains at an effective rate below wages while capital claims a rising share of GDP. This isn't tax policy, it's a mechanism for converting productive capacity into financial rents while starving the demand base that keeps the economy solvent.