Quote:
Originally Posted by zimmy
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%
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I see your point.
I believe the incentive of the capital gains tax code at a lower rate was to give
incentive to invest long term in our capitalistic system.
Short term gains are taxable a much higher rate as the $$ aren't staying to help growth. Just my simplistic way of looking at it.
Your right, every business is a risk and toget investors $$$ there has to be
incentive for return.
If your labor produces $100 it is taxed at $25. Tax #1. Take the $75 left
and invest it and your taxed again on any gains at 15%. Tax#2.
However you look at it,the Govt. wins twice on your Labor/ Investment.
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