Reply #73: Who gives the privilege?

[talkinghead]

If capital is a privilege then someone gives that to me, which means someone owned it before I did. Sorry, but government does not "give" anyone the right to capital because government doesn't possess it in the first place. Capital is unowned or non-existent until someone creates it. Individuals are the most efficient owners of capital because they assume the risk and operate by the profit motive. The owner has the incentive to employ the capital efficiently or else he looses his investment. When government owns something it does not operate by the profit motive and is thus inefficient. The tax you speak of is also inefficient. On the margins, taxes prevent someone from owning capital they otherwise could have purchased in the market. Taxes distort markets, reduce output, and encourage wasteful rent-seeking as people look for ways around the taxes.