alt Hacker News> Labor income is very important at the top end. The work a CEO performs in her superintendence of a large company generates what's economically labor income, even when paid as stock grants, options or the like. Basically all professional income (including that of devs) is labor income, not capital income.
If the CEO has a significant voting power in his company, then it's capital income even if the said income is “a salary”. Like it or not.
> Besides, optimal taxation models also say that capital income should not be taxed at all
It would be nice if people advocating for their political view could stop labeling their view as “optimal”, but hey, this is economics so here we are.
The optimality results are drawn from modeling assumptions that happen to be fairly general, not from any specific political views. For instance, much of the real-world political advocacy of UBI or cash transfers towards low-income folks is downstream from arguments about the predicted efficacy of this as a kind of redistribution; the arguments are not themselves politically motivated. The argument for taxing pure rents only, as opposed to productive capital, is structurally quite similar; as is the general argument for paying careful attention to incentive effects at the top end of the income distribution.