I. The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities;

that is, in proportion to the revenue which they respectively enjoy under the protection of the state.

The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate.

In the observation or neglect of this maxim consists what is called the equality or inequality of taxation.

Every tax, it must be observed once for all, which falls finally upon one only of the three sorts of revenue above mentioned, is necessarily unequal in so far as it does not affect the other two.

[...]

Don’t We Want to Encourage Venture Capital?

The venture capital industry is lobbying for a carve-out from the carried interest provision. They point out they foster small business, encourage innovation, and create jobs, so we don’t want this type of investment to dry up. It’s a tempting argument, but try to see through the smoke. The change affects only the managers of venture capital funds. It doesn’t change how the investors are taxed. The managers will take home less cash, but they still have plenty of incentive to work hard and make the fund successful—remember that 20 percent interest they get, plus the 2 percent management fee. The venture capitalists provide important services, but no more important than the teachers who educate our kids to create the next round of innovations. Teachers’ salaries shouldn’t be taxed at higher rates than venture capitalists’ compensation.