Capital Gains Tax Debate

Or you could tax capital gains at the same rate as income. Poor people generally don't have capital to have gains on.

if capital gains were taxed like income (ie, at a higher rate), people would invest less money. is this good?

As it stands, income gets higher tax than capital gains. Capital gains are taxed at half the income tax rate. So people who make most of their money on capital gains are 1) very wealthy 2) paying less tax than poorer people who rely on working for a living 3) incentivized to keep their money in investment vehicles and out of circulation.I'd suggest reversing it and taxing capital gains at the full rate and income tax at half. This is how it's done in Switzerland I believe, if you wa

A substantial majority of economists agree that capital gains should have a lower tax rate than wage income. There are lots of good reasons for this (fake gains due to inflation, the fact that gains come over multiple years, interactions between corporate taxes and cap gains). It really doesn't have anything to do with scheming.

Because rich people earn more from capital gains than income?

Tax wealth and capital rather than income. You want to tax gain in capital rather than direct income (just reverse the capital gains and income tax rates, and gains are realised when stock prices go up, rather than when you sell if your stock values are above a certain small number).

Why not just tax capital gains and interest payments more?

Is there any reason we aren't taxing capital gains at the same rate as income?

Well, there are lots of reasons as to why capital gains are taxed at a lower rate than ordinary income. I'm not advocating that any of them are correct (and, obviously, many countries tax capital gains and ordinary income at the same rate, or possibly capital gains at a higher rate), but you could argue that a lower tax rate on capital gains offsets the impact of double taxation (corporation is taxed on the income, then you are taxed on your income), or offsets inflation, or, probably most promi

It could be that people with capital have all the money because capital gains rates are significantly lower than earned income rates. Maybe we could adjust that so as not to continue distorting the economy?