Tuesday, October 16, 2007

Capital Gains Taxes

Taxing capital gains at a lower rate than ordinary income is a long-established policy to encourage risk taking and investment. Since we already tax corporate earnings at 35% through the corporate income tax, taxing those profits again when the stock is sold imposes a double tax on risk capital. That's why 12 industrialized nations, including Hong Kong and Korea, impose a zero capital gains rate.

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Republicans: decrease rates to increase revenue
Democrats: increase rates to increase revenue

Me: Why not let people keep their money and have a 0% capital gains tax rate?

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