Sweeping Reform Would Tax Capital Gains Like Ordinary Income

Re:Sweeping Reform Would Tax Capital Gains Like Ordinary Income by dboreham on Sunday April 07, 2019 @11:49AM (#19597527)

I'm guessing there's some actual reason we tax capital gains at a lower rate..

Didn't find that in the article but it's probably along the lines of : the stock market would plummet like a rock otherwise, also real estate. And everyone's net worth is tied up in those asset classes.

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Re:Sweeping Reform Would Tax Capital Gains Like Ordinary Income by coredog64 on Sunday April 07, 2019 @12:24PM (#19597825)

A couple of theories: You’re putting capital at risk, so you need incentives to account for the risk. Another is that capital gains aren’t indexed to inflation (which would be a nightmare to compute), so the long term rates are lower to bake inflation in.

The US used to tax capital gains at higher rates, but when they did they also had generous exclusions (IIRC, the first 50% wasn’t taxed)

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Re:Sweeping Reform Would Tax Capital Gains Like Ordinary Income by tomp on Sunday April 07, 2019 @11:51AM (#19597543)

> stock market would plummet like a rock otherwise

Why would it? I mean, it wouldn't affect the fair value of companies... just the amount of actual cash you get out of selling the price (and if only gains are taxed, the tax is proportional, meaning that you it can't tax profit into loss, only profit into less profit).

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Re:Sweeping Reform Would Tax Capital Gains Like Ordinary Income by TomMarius on Sunday April 07, 2019 @12:01PM (#19597620)

It would create many economical forces causing investors to not want to invest in the stock market, eventually causing its demise. Each one has been already described in other comments.

From my (EU citizen) POI, please go ahead. This will help Europe greatly as it's the most rational place to move assets for most Americans, with many great places with great tax and business culture + these are really nice places to live in, actually. That will in turn raise EU wages to the likes of the USA - thanks!

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Re:Sweeping Reform Would Tax Capital Gains Like Ordinary Income by cheerlessbog on Sunday April 07, 2019 @12:01PM (#19597627)

It's sometimes argued that it would amount to double taxation since corporate tax was already paid (on income you "own" being a shareholder).

On the other hand we provide corporations unique legal benefits, from which as a shareholder you benefit, it is reasonable for them to have a unique tax regime.

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