WSU MUP Student
Cyburbian
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http://www.realclearpolitics.com/articles/2012/10/02/capital_gains_taxes_115635.html
This is the best article I have seen that describes why capital gains taxes are different from regular income. I wanted to get your thoughts on capital gains taxes, as I know many of you are much smarter than I when it comes to taxes and tax policy.
I don't know if I have an opinion on whether or not capital gains taxes should be lower than regular income or not. I think I can see both sides at this point.
Thoughts?
His opening argument equating his ten years of work and his book royalty advance to a capital gain seems pretty flawed since the only capital he has invested is time (not counting foregone income from not investing his time elsewhere) and the laws of nature and physics do not allow him to post a gain on that form of capital.
Regarding his closing thoughts, and his opinion about politicians who "jack up tax rates" though, I disagree, especially regarding corporate taxes and capital gains. Lower corporate taxes and lower capital gains taxes encourage the financiers to take the profits out of the businesses to pay higher bonuses and dividends. If the rates were higher there would be less incentive to take as much money out because the corporations could lower their profits (and therefore their tax liability) by reinvesting those funds back into their firms to advance research, increase regular wages, improve services, etc.
Personally I would prefer to see the capital gains taxed the same as regular income.