Just a Gwai Lo

Zimran: “There is a very good reason to not tax savings -- it's very inefficient. Savings can run around easily to avoid tax. Companies can hide profits through depreciation schedules, debt payments, share buy-backs, and a hundred other things taught in first year business school classes. Investors can house money offshore, in various financial instruments, in nonprofit annuity schemes etc. People can simply move savings into things like houses which can be classified as consumption, come with tax breaks, but really are an asset just like anything else. The inefficiency from taxes chasing this money come from 1) the high auditing cost to try and pin this money down and 2) the dead weight loss (economic distortion) that comes from the forgone opportunities that these shenanigans preclude.”