Oliver Wendell Holmes Jr. called taxes “the price we pay for civilization.” In the latest Returns on Investment podcast, our regular roundtable goes even further: how can the tax code be used to nudge investments toward a future we’d all want to live in?
“You have a leadership that can’t think beyond ‘less taxes,’” says Imogen Rose-Smith, an investment fellow with the University of California. Which makes it all the more important to break out of such narrow confines with smart – dare we say bipartisan? – ideas.
A few ideas lofted on the podcast (even if they may not fly in the halls of Congress):
An infrastructure bank capitalized with some of the hundreds of billions of dollars in overseas corporate (mostly tech) profits.
Capital-gains tax deferral in return for low-income or inner-city community development investments, along the lines of the bipartisan Investing in Opportunity Act.
A robot tax or, conversely, a payroll tax cut to end the tax advantages that androids currently enjoy over humans.
A “clean tax cut” that reduces taxes on profits from clean energy, cutting the cost of capital and making low-carbon energy even cheaper.
How might we think beyond just cutting taxes based on some unproven – disproven? — notion that tax cuts drive economic growth and come up with a plan to…drive economic growth?
“We should reframe taxes as the investment we make in that commons in which we can then all prosper and thrive,” I offer, naively, in the discussion. “Your business grows up in a milieu that allows it to succeed, and you pay some of that forward so that can keep happening.”
For better or worse, we all have a long tax debate ahead. ImpactAlpha is on the lookout for ways to code the tax algorithm to output sustainable, inclusive prosperity. Send us your tax hacks at [email protected].