US Tax system affects investments

Because the income tax is regressive, taxing income rather than wealth, the gap between rich and poor in the United States is widening. Because an increasing large segment of the electorate is either on the government payroll, or exempt from income taxes, or otherwise beneficiaries of tax money, the Snare of Democracy continues to discourage entrepreneurs, drying up the supply of equities and widening the gap between rich and poor. Eventually — although perhaps not for years — this trend must have political consequences, unless countervailing forces intervene.

Tax the spenders as a form of flat tax has been proposed in the past.

In 1860, about two-thirds of Americans were self-employed, mostly on family farms. By 1948, self-employment had fallen to 18.5%. By 1994, only 8.7% of Americans were their own boss. Whereas the United States was founded as a nation of proprietors (owning property was a qualification for voting), after two hundred years, America had become a nation of employees.

So much for the self-employed trend

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