Steve Roth — “If you tax investment income what will people do? Stuff their money in the mattress?”

Summary:
A lot of pseudo-problems arise from confusion about use of terms, especially when key terms are ambiguous. For example, "capital" can be either financial or non-finanacial ("real" or actual).  "Investment" has two different meanings. Financial "investment" is portfolio wealth held as financial instruments a form of savings in contrast to real goods like real estate, physical precious metals, and collectibles like art. "Savings" denotes a stock, and "saving" denotes a flow.  "Savings" denotes portfolio holdings that can be held either in financial instruments or non-fiancial goods. "Saving" is defined in macroeconomics as income not spent ("consumed") in an accounting period. Failure to recognize these ambiguities results in conflation of concepts and confusion about finance

Topics:
Mike Norman considers the following as important: investment, Richard Thaler

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