Quote:
Originally Posted by Matt 26z
The initial investment is not taxed again.
IMO the capital gains tax should be 0% for the little guy to encourage investment (poor retirees included). While I wouldn't mind 0% across the board, I don't think anyone can cry over it matching the income tax bracket system. Especially considering this is money you don't really work for. You don't contribute anything to society to earn it.
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Romney's plan is to keep capital gains tax at 15% for anyone making over $200,000 Anyone under that will be taxed at 0%. Thus saving retirement plans.
Obama wants to raise everyone's capital gains tax.
And here is what tax.com has to say about capital gains and double taxation:
"1) All taxation of saving is a form of double taxation. This observation is nothing new to economists. For example, in 1848 the British philosopher and economist John Stuart Mill wrote: "Unless . . . savings are exempt from tax, the contributors are taxed twice on what they save, and only once on what they spend." Since then, economists have often said things like "income from saving is taxed twice." This is another way of saying an income tax is biased against saving -- a bias not shared by a consumption tax.
(2) Profits giving rise to capital gain on equities have already been subject to corporate tax. There is no good economic justification for the corporate tax. It is unfair and inefficient to tax profits first with the corporate tax and then again with an individual tax either on dividends or capital gains.
3) Inflationary gains are not real income and should not be subject to tax. The relative stability of the price level over the past three decades has greatly reduced concerns about the highly detrimental effects of inflation on the operation of the income tax. But even at low levels, inflation overstates returns to capital. One manifestation of this problem is the taxation of inflationary gains as if they represented appreciation in real value. "