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Filthy Lucre

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Filthy Lucre

Is money earned on money saved or invested supposed to be taxed or is this double-taxation? That is an old philosophical question. Most religions do not approve of money making money which is considered usury.

The monotheistic religions all consider the return from investment as less wholesome than the return from work.

Islam prohibits ''riba'', defined as interest, based on a revelation to Mohamed written in the Koran.

St. Thomas Aquinas, the medieval saint and thinker, famously called interest ''filthy lucre''.

Judaism prohibits charging interest on loans to other Jews. But in the Middle Ages the sages allowed Jews to charge interest on loans to non-Jews, mainly because it was hard for Jews to survive otherwise.

So Pres. Obama's proposal to tax unearned income topping $1 mn per taxpayer per year is firmly within the Judeo-Christian canon. And if it was sheltered by being retained at the firm to cut taxes on its execs as was done by Bain Capital (not alone in that form of perq for execs, who can then pay at the capital gains rate) it is even more vulnerable.

Of course the Church of Jesus Christ of the Latter-Day Saints is not wholly Judeo-Christian and I have a suspicion that its tenets do not condemn usury or money making money.

However, I think it will be tough for Mitt Romney to defend a tax proposal from which he will be a victim with a 30% bite vs a current 14%.

More for paid subscribers follows from Israel, Finland, and Singapore and a few other places where we have ill-got gains from filthy lucre like Israel, India, Germany, South Africa, and Brazil

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.