>thanks for continuing this interesting conversation!

Cheers!

>Money does not determine resource allocation. But spending money does!

Very good point. Investors have some say as to where the money goes, but you're right. Often said that the economy runs on debt.

>They spend only a tiny fraction of it – and invest the rest.

Well said. I suppose their wealth only represents a potential for resource allocation.

>If we forced them to spend that wealth, much of the economy’s resources would be redirected to provide goods and services to the top 1% of people.

Under most theories of value, this extreme demand and labor would cause the price of such luxury goods and services to skyrocket! The money would quickly distribute to the hands of those who provided such goods. Then the masses can spend the money.

I now see our discussion as a classic debate of supply-side vs demand-side economics. I'll steal "the unity of means and ends" from the anarchists for this: I fully believe that the masses must have the resource allocation potential in order to achieve greater wealth for all. That exists in a positive feedback loop with businesses, increasing technology and production, and increasing the general standard of living. But, investing gives the resource allocation power to the businesses. With enough wealth and power, large businesses can keep the investment cycle flowing between businesses and owners, underpaying the workers and buying out competitors. At the most extreme result, a vertically closed system where the workers must meet the needs of the business (company towns).

>These are not easily adapted to produce things that regular people need.

So many goods start out as expensive luxury goods. Refrigeration, commercial airlines, air conditioning, computers, HDTVs, cell phones...

>When a small number of people can, in effect, buy the government with pocket change, that’s not good.

Then they morph government policy towards further enriching themselves, hurting the masses in the process. Very bad!

Would you advocate for a 0% capital gains tax? Or a capital gains tax-break? How would you calculate the ideal number? (I would place capital gains tax included in income tax.)

> Would you advocate for a 0% capital gains tax? Or a capital gains tax-break? How would you calculate the ideal number? (I would place capital gains tax included in income tax.)

I wouldn't advocate for any particular tax rate for capital gains without it being part of comprehensive fiscal and government reform. The point I was trying to get across in my original comment was that, when people talk about raising the capital gains tax because they think it's an obvious way to tax the rich without affecting working people and that the only reason we're not already doing it is because the rich have rigged the system, the reality is way more complicated. There are no easy fixes. Changing the capital gains tax substantially (outside of more widespread reforms) is likely to have unwanted consequences. And even with widespread reforms, we're likely to suffer unwanted consequences.

Reality is way more complex than talking points.