Quote:
Originally Posted by L-Pink
Re; capital gains ... You are being rewarded for both the risk taken in your investment as well as the fact you hold onto your investment for at least a year.
A risk is not taken in a regular paycheck job. A risk IS taken when you buy stocks or build a business property.
Conversely if you lose money on your investment you don't get to take that loss as a deduction. (except for a max of $3,000 a year)
There are valid reasons for a lower capital gain risk/investment tax rate.
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If I understand it correctly you get taxed at a normal rate for gambling winnings right? How is that different than gains from the stock market? You took a risk and won.
I understand what you are saying. The government is using this lower tax rate to encourage you to invest by telling you if you win and earn money on that investment you will pay less taxes from it. The problem is that there are some investments that have guaranteed returns and unless you have a lot of money to start with you can't get any kind of significant return. If you have a lot of money you can use these guaranteed returns as a way to easily avoid a lot of taxes.