Economists are sceptical of taxing other forms of capital,
for the good reason that it discourages investment.
But capital's share of rich-world GDP has risen by four percentage points since 1975,
transferring nearly $2trn of annual global income out of paycheques and into investors'pockets.
Given that competition is declining in many markets,
this suggests that businesses are increasingly able to extract rents from the economy.
Taxes on capital can target those rents without disturbing incentives so long as they include carve-outs for investment.
To stop companies shifting profits, governments should switch their focus from firms to investors.
Profits ultimately flow to shareholders as dividends and buy-backs.
But few people are likely to emigrate to avoid taxes on their investment income—
Apple can move its intellectual property to Ireland, but it cannot put its shareholders there.
Corporate tax should be a backstop, to ensure that investors who do not pay taxes themselves, such as foreigners and universities, still make some contribution.
Full investment expensing should be standard;
deductions for debt interest, which incentivise risky leverage for no good reason, should be scrapped.
As the labour market continues to polarise between high earners and everyone else,
income taxes should be low or negative for the lowest earners.
That means getting rid of regressive payroll taxes which, in North America, could be replaced with underused taxes on consumption.
Though these are also regressive, they are much more efficient.
Adam Smith said that taxes should be efficient, certain, convenient and fair.
Against that standard, today’s tax policies are unforgivably cack-handed.
Politicians rarely consider the purpose and scope of taxation.
When they do change tax codes, they clumsily bolt on new levies and snap off old ones, all in a rush for good headlines.
Rewriting the codes means winning over sceptical voters and defying rapacious special interests.
It is hard work.
But the prize is well worth the fight.