So, in the USA, if I were to make $50,000 in a year producing widgets, the tax rate on that amount would be higher if I made the widgets by hand than if I had a robot produce the widgets for me? That is interesting. In my country, the product of capital is taxed at the same rate as the product of labour.

Or are you trying to talk about capital gains? The human equivalent of gains on the sale of capital would be profiting from a slave trade, and I understand that is illegal in the USA, as it is in my country. I am not sure you can meaningfully contrast capital gains with anything human-related, and certainly not the product of labour.

No, you spent $50,000 buying labor vs. $50,000 aquiring machines and parts to build widgets, your taxes and the taxes on the people you bought from would be higher in the labor case.

> Or are you trying to talk about capital gains? The human equivalent of gains on the sale of capital would be profiting from a slave trade

No, the human equivalent of capital gains is capital gains, since all capital gains are earned by hunans or legal fictions representing them. But the labor equivalent is wages; earnings from production are split between capital and labor, the labor share distributed as a mix of immediate and deferred wages, the capital share (eventually) extracted as capital gains, either directly as dividends or by trading future interest in dividends for current money by selling stock, etc.

This is not, however, an alternative to the analysis of taxes impacting the production methods; the two are both different framings of the same facts: capital gains are taxed preferentially to “normal” income which in turn is taced preferentially to labor income.

Why is that?

The taxes paid would be the same here. If we say the rate is 10%, labour case would pay a straight $5,000. In the machine case the business selling it might profit $5,000, so they would pay $500, and $25,000 in labour costs to produce the machine, so they would pay $2,500, and $20,000 in materials gets divvied up in the same manner, leaving another $2,000. 500 + 2500 + 2000 = $5,000.

> No, the human equivalent of capital gains is capital gains

Okay, but then from that perspective the capital gains tax rate is always the same capital gains rate no matter what. The earlier comment suggested there were different rates. I guess that isn't the case.

No, they wouldn't, because payroll taxes exist, and are paid by both the employer and employee.

> Okay, but then from that perspective the capital gains tax rate is always the same capital gains rate no matter what

I was taking issue with your misuse of “human” for what ia properly “labor” (which is as much a human means of relating to a capitalist econony as capital is), and also discussed what the labor equivalent of capital gains taxes (which are very much not the same.)

Here that is not the case. The employer pays half of an employee's contribution into a retirement and insurance fund, but that is not a tax. That is additional compensation provided to the employee.

What's the logic behind taxing payroll?

> I was taking issue with your misuse of “human” for what ia properly “labor”

Labour is the productive output of a human. Capital gains is a property of the exchange of capital. The closest analog to capital gains with respect to labour is the sale of humans (i.e. slave trade).

You haven't taken issue with anything, you've only repeated that it is silly to try and talk about capital gains and labour together. They are not meaningfully compared or contrasted.

If your capital holdings produced $1,000,000 in productive output, presumably in the US you would pay the same taxes as if you you made $1,000,000 selling your labour. That would be the case here.

After all, the value of capital is determined by its productivity potential. If there is no ability to generate productivity, the capital will be worthless, and then there will be no capital gains to speak of.

Let's face it, the real problem with the tax code (in this country, but I understand the US is the same) is that the borrowed income against capital is not taxed at all. This allows one to effectively create money out of thin air without paying a cent.