The reason, feeble as it is, is because taxing capital gains is thought to reduce investment which is thought to drive economic growth and prosperity. There is some truth to this. But also, one essentially has two options with what to do with money - spend or save/invest - so the logic is not really that great. Increasing taxes on capita…
The reason, feeble as it is, is because taxing capital gains is thought to reduce investment which is thought to drive economic growth and prosperity. There is some truth to this. But also, one essentially has two options with what to do with money - spend or save/invest - so the logic is not really that great. Increasing taxes on capital gains would cause more consumption less investment, but wealthy people can only consume so much.
For all the right wing talking points of what we encourage with tax policy, we seem to be disincentivizing labor aka actual work.
My $0.02 - these should be taxed the same, income is income.
Yes and just as we monitor labor rates, we could be monitoring investment rates or how easy is it to get a loan. I think the fed does this to set interest rates. It’s also a bit on who can make those investments to earn those gains - limited to those with wealth - so a higher tax on capital helps in terms to taxing wealth.
The reason, feeble as it is, is because taxing capital gains is thought to reduce investment which is thought to drive economic growth and prosperity. There is some truth to this. But also, one essentially has two options with what to do with money - spend or save/invest - so the logic is not really that great. Increasing taxes on capital gains would cause more consumption less investment, but wealthy people can only consume so much.
For all the right wing talking points of what we encourage with tax policy, we seem to be disincentivizing labor aka actual work.
My $0.02 - these should be taxed the same, income is income.
Yes and just as we monitor labor rates, we could be monitoring investment rates or how easy is it to get a loan. I think the fed does this to set interest rates. It’s also a bit on who can make those investments to earn those gains - limited to those with wealth - so a higher tax on capital helps in terms to taxing wealth.