Jay A. Soled


In a technological age, labor no longer plays the central role it once did in the nation’s economy. Instead, automation has become more ubiquitous. This economic transformation has important and far- reaching consequences for the nation’s tax system and, in particular, the means by which to fund public expenditures.

Under current law, the central underpinning to automation— namely, capital—yields income that is either lightly taxed or, in some instances, escapes taxation altogether. This puts tremendous stress on the nation’s coffers and further perpetuates wealth disparities. Yet, levying a heavier capital gains tax burden might (i) dissuade taxpayers from realizing their gains and (ii) in a global arena, result in capital flight to lower tax jurisdictions.

Another possibility exists. Congress should impose a meaningful estate tax. Such a tax is essentially the equivalent of a deferred tax on capital income. A reimagined estate tax can help restore fiscal solvency, promote greater wealth equity, foster capital gains recognition, and minimize capital flight risk.



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.