Here’s a real political issue that you won’t see discussed much this year, but that in actuality is very important to the future of this country. The issue is whether the tax burden should fall upon capital or upon consumption. For many years, I’ve felt like taxes on capital gains should be just as high as the taxes on wages for reasons of fairness. I’ve never understood why rich people who earn their money by investing should pay a lower tax rate than working people who earn their money by going to a job that they probably hate. That just strikes me as fundamentally unfair.
What conservative economists will tell you, though, is that taxes on consumption are much more efficient than taxes on capital. So, overall, people are better off if capital is taxed at a lower rate (or not at all). The fact that this policy is horribly regressive is a side effect. It’s an interesting question, and not one that I’ve ever seen an elected official discuss.