Tax Capital Gains like Ordinary Income and Jettison Keynesian Economic Philosophy


This memo bears reference to two previously circulated notes, entitled, "Fallacy of Keynesian Economic Philosophy," and "Winning Economic Philosophy of Governance. Since December 15, 2012, the Economic Philosophy" has been rechristened as Constitutional Capitalism for First-best Governance, because it denotes first-best efficient rules for governance of financial markets to preserve long-run economic equilibrium (stability). The first-best efficient rules obtain in a very general model of the comprising leveraged households and businesses maximizing their net-worth, markets pricing assets and a not-for-profit government running efficiently. The only ulterior goal of this author is to beseech government to adopt only those rules which maintain long-run economic equilibrium (stability).

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