Quote:
Originally Posted by zimmy
Bingo. Some of my take on it... so guy A goes to work, makes $50,000 busting his arse in the mill or whatever and gets hit @ 25%. Multi-millionaire ceo gets $100,000 or whatever capital gains from money sitting an account and gets taxed on that at 18% (not sure what the percentages actually are). Not sure that is a reasonable policy.
|
Apples and oranges, as some like to say on this forum. Capital gains tax and income tax are two different kinds of tax. You might say capital gains at a lower rate than employment tax is a "targeted" tax. It tries to create results other than mere "revenue." Supposedly, it should "stimulate" investment. So folks who have extra "wealth," rather than spending it, or stuffing it under the mattress, might put it to productive use for the rest of society by capitalizing business and job production. Capital gains benefits the wealthy only because they can invest more. But it doesn't favor the wealthy within its structure. Middle class or lower often get lower or no capital gains tax (e.g., when selling a home). It would be more honest to compare similar taxes as paid by the rich versus the poor. A wealthy person, perhaps a CEO of a big corp., who "earns" income, may have an income tax and a capital gains tax to pay. His income tax will be at a higher rate than that of a middle class or poor earner. His capital gains tax might also be at a higher rate. If there are loop holes, if they are not "targeted" to help create a more productive outcome, they should be eliminated. If capital gains is, ultimately, a scam and doesn't produce the desired investment, it shouldn't be tweaked, it should be eliminated and all gains should be considered income as earned.
But an underlying problem in deciding is whether our economic view is win/win or win/lose. When tax policy benefits or harms all parties, its a win/win (or lose/lose). When it benefits one party and harms another its win/lose. Win/lose creates internal warfare and jealousy. If capitl gains tax is not a win/win, in my opinion, it should be abolished.