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Capital Gains Can Be Labor Income

Economy
United States
Started July 7, 2026

Zwick and Zidar argue that a substantial share of the decline in labor share can be accounted for by changing forms of pay, including pass-throughs and equtiy compensation. In particular, if an employee is paid in stock and that stock increases in value then the tax rules tend to count some of that as capital […] The post Capital Gains Can Be Labor Income appeared first on Marginal REVOLUTION. CommentsIRS tax… 83b election wage income to capital gains by AtomRelated StoriesDo falling birth ra...

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CLAIM Posted by will • Jul 7, 2026
Relying on capital gains as labor income could incentivize companies to prioritize stock options over traditional wages, impacting employee stability.
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CLAIM Posted by will • Jul 7, 2026
Taxing capital gains as labor income reflects the reality of modern compensation structures, promoting fairness in our tax system.
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CLAIM Posted by will • Jul 7, 2026
Recognizing capital gains as labor income could encourage investment in employee performance, aligning personal and company success more closely.
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CLAIM Posted by will • Jul 7, 2026
The shift towards equity compensation shows how labor income definitions must evolve to keep pace with changing job markets and compensation trends.
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CLAIM Posted by will • Jul 7, 2026
Classifying capital gains as labor income undermines the principle of taxing income differently based on its source, potentially leading to inequities.
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