Its rate of return on capital may be a lot less than America's a fact that has attracted attention lately but it is no worse than in many European economies.

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In theory, the resulting efficiencies should mean that Germany could raise its poor average rate of return on invested capital.

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Indeed, the IMF's analysis suggests that the internal rate of return on invested capital in publicly traded firms in emerging markets has been very poor over the past decade, even before currency risk is taken into account.

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In a Deloitte study of 20, 000 US firms, the rate of return on assets and invested capital declined by 75 percent during the period 1965-2011.

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The notion behind the yardsticks is simple: a company creates value only if the return on its capital is greater than the opportunity cost of it, or the rate that investors could earn by investing in other securities with the same risk.

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The second result from a rise in capital gains taxes is that it would change the return on investment which would lower the overall rate of saving and investing and as a consequence lower the overall capital investment which in turn would lower GDP growth and expansion.

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This can create the very odd situation for some wealthy filers whose income composed primarily of capital gains and qualified dividends are taxed at a rate of only 15% on their Federal return and 9.55% (or more) on their state.

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This way capital gains and dividends will be taxed at a top rate of 15%, whereas the investment return on deferred pay is all eventually taxed as ordinary income at a top rate of 35%.

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