Quote:
Originally Posted by JohnnyD
just like income is income whether it was earned through dividends or a paycheck.
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Wrong.
Investing in a company (whether you are hoping for dividends or capital gains) involves RISK, LOTS OF RISK. We need to encourage investors to take on that risk, and the way you do that is to make the "reward" comparable to the risk.
Capital gains are the "cost" of making money by investing. Chapter 1 of any economics text will clearly state that when you increase the cost of something, the demand for that something (no matter what it is), goes down. You don't want to stifle the demand for investment returns, particularly in a recession.
Money earned through investing is very, very different than what you earn in a bi-weekly paycheck. I don't need to risk any of my personal assets in order to earn a paycheck. There are, in my opinion, valid reasons why capital gains are taxed at a rate lower than income.
Here's what gets me about all this...John Kerry is worth 10 times what Mitt Romney is worth, and Kerry's effective tax rate is a little lower than Romney's. Where was all this outrage when Kerry ran for President? Menaing, it's OK when rich liberals do this, but when conservatives do it, they are out to screw the middle class. It's bullsh*t.
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