people buy lottery tickets. So, we should expect the government to lose money (if possible):
from people taking on stupid risks
The government loses money if the average investor is losing money. But that’s not true, the average investor makes a lot of money. (And once you weight by tax %, it’s even more stark.) I guess you could think there are some investors who go bust (losing too large a fraction of their ordinary income to ever collect on the rebate) while others won’t change their behavior at all under this policy. But I do think we need to get into some kind of quantitative model of that (and it doesn’t look super likely to me).
The government loses money if the average investor is losing money. But that’s not true, the average investor makes a lot of money. (And once you weight by tax %, it’s even more stark.) I guess you could think there are some investors who go bust (losing too large a fraction of their ordinary income to ever collect on the rebate) while others won’t change their behavior at all under this policy. But I do think we need to get into some kind of quantitative model of that (and it doesn’t look super likely to me).