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Originally Posted by justplugit
I agree, however the reasoning in this case is sound.
As you prolly know, dollars, already taxed at income levels, are invested in stock that gives capital to companies to hopefully expand and hire more employees.
The lower tax rate on possible gains is an incentive to invest.
Govt. does pretty good, double taxation with the 15% after the investor takes all the risks.
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Yes, but income is income. The incentive is to make money from investment as opposed to making money from labor or services. The incentive to invest (lower rate) is a subsidy. If a person making 100,000 was taxed at a lower rate, they would have more money to invest. It is like saying the investment in a company by a millionaire is a more valuable use of money than a middle class person paying for their kids college. Whether a person makes their money from risk or not is irrelevant. Every business is risk. It
is not double taxation. You invest $100 and make $10, you are only taxed on the $10.. You have $10 income taxed at 15%. Or in many cases millions of dollars income taxed at 15%