[Eddy_Viscosity2]

Why is it that property is taxed less than productive work? Someone sitting on their ass doing nothing but sucking resources through dividend payments has that income taxed less than the workers' income who did the work that generated those dividends. Why isn't the reverse the case? Heavily tax passive income, and lightly tax active income. Incentivize productive activity and penalize rent-seeking parasites?

[xp84]

The reason to not tax investment super harshly is that it’s an incentive to not just stuff your money under a mattress. Many people have jobs and careers they wouldn’t otherwise have specifically because 100 rich guys stuck their money in various VC funds (especially in this here audience on HN). If we taxed the idea of investment ruinously, we decrease that incentive. You may think that somehow all those jobs (or more) would somehow materialize without investors investing, but that’s a hypothesis or an argument, not a proven conclusion.

[Eddy_Viscosity2]

I've heard this argument, but as long as there is some return then people will invest because some is better than none. VC investments have the potential to return insane amounts, so people will still buy those lottery tickets even if the profits are taxed. I know this because actual lottery winnings are taxed and people still buy those tickets in huge numbers. And if you are saying that taxing investments the same as worked income is 'super harshly' and 'ruinously' high, then what does that say about the state of wage taxes?