Quote:
Originally Posted by woj
it needs to be taxed less because:
a. to stimulate investment
b. it's not necessarily income, for example: today you buy a bike for $100, 10 years later you sell it for $150... naive person would think that they have made $50 profit...
but you actually didn't make shit, cause in 10 years all bikes will cost $150 (due to inflation), so you didn't actually become any wealthier... and you actually lost wealth, cause you started with enough "wealth" to buy a bike, but after you pay capital gains taxes on the $50 "profit" you will no longer be able to afford a bike...  |
When capital gains were treated like regular income there was just as much investment. So that argument is moot.
As for your second point, if you don't like capital gains being income lobby to have the definition of income changed.
While you're at it, lobby so that if you make $100 per year and spend $95 that the following year you should only pay taxes on $5 because you're really just getting back the money you invested in the economy with your purchases.