why is the return on capital, versus say the return on labor, so high?
Because labour, by and large, isn't particularly mobile, whereas capital is highly mobile, despite governments' best efforts. It's simply cheaper to enforce labour taxation than capital gains taxation.
A second reason is stability: in a recession, employment drops by a few percent, whereas consumption (sales taxes) typically drops much more sharply, and capital gains even more so.
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why is the return on capital, versus say the return on labor, so high?
Because labour, by and large, isn't particularly mobile, whereas capital is highly mobile, despite governments' best efforts. It's simply cheaper to enforce labour taxation than capital gains taxation.
A second reason is stability: in a recession, employment drops by a few percent, whereas consumption (sales taxes) typically drops much more sharply, and capital gains even more so.