[anigbrowl]

Let's say you wanted to give income from labor the same benefits as (negative) income from investments that lost money... How would you do that?

I am not all that sure about carrying forward investment losses, and as you are aware some expenses are deductible while some are not. While eating a fancy restaurant is strictly optional, spending on medical of educational costs are quite different.

In general I think if someone investigates the edge cases first (eg looking at the second-order effect like carrying deductions on negative income) that's a sign of not wanting to look at the larger picture.

[OrwellianChild]

From your edge-case comment, it sounds like you'd prefer that losses from business income not roll over, rather than making rollovers accessible to individuals. I was approaching it the other way - trying to see if there was a reasonable way to credit individuals with a "P&L" view of their finances that could cross multiple years.

As you indicated above, so much of our personal expenses are "discretionary" in the sense that we could increase or lower them by choice. That's exactly the difference between business investment spending (required to produce the revenue that's taxed) vs. personal income/spending, which is based strongly on preferences. Hard to justify taxing frugal individuals more than lavish spenders just because they save a larger percentage of their income...

[crgwbr]

From a purely theoretical standpoint, I’m terribly curious what would happen if we incentivized spending like that. I’m sure it’d be terrible in the long run, but it’d also have definite macroeconomic stimulus effects.

[angus-prune]

There is a short scifi story from the 50s called the Midas Plague by Frederik Pohl which deals with this in a very silly way.

It's available through archive.org https://archive.org/stream/galaxymagazine-1954-04/Galaxy_195...