Cut IncomeTaxes; Increase Capital Gains Taxes?

[erpowers]

Should the U.S. government cut income taxes by ten percent while increasing capital gains taxes by ten percent? Cutting income taxes would reduce the burden on income earners while the increase of capital gains taxes would increase the burden on investments. It seems increasing capital gains taxes could reduce wealth inequality. My only problem, at this point, with increasing capital gains taxes is the affect it would have on retirees. When someone retired they would have to pay 35% in capital gains taxes on their retirement money. So, what do others think? How would you reshape the tax system?

[SoLeftIAmRight]

1. yes

...

[JonLeibowitz]

2. The U.S. government should tax capital gains at the same rate as income, IMO.

To do otherwise is to promote the economic elite (capital) at the expense of the worker (labor). And it is already happening.

Before anyone asks, yes, this change would hurt me financially. But it is worth it.

[safeinOhio]

3. Put a reasonable limit on

capital gains. Let it kick in after 20K or some other fair amount.

[SharonAnn]

4. Capital Gain is income. Tax it at the same rate as earned income.

Why on earth should "unearned income" get a preferential tax rate? if anything, it should go back to the old days (1960's?) where short term capital gains were taxed at 50% to discourage speculation.

[Kip Humphrey]

5. I prefer to not tax the first $500,000 in wages, and tax the rest with capital gains incorporating

a simple, progressive, capital gains tax-rate schedule. The progressive scale protects lower earners, placing the highest burden on the highest earners. Certain retirement/education/health investment accounts are exempt.

[HooptieWagon]

6. No, and yes.

I think interest, dividends, and short-term capital gains should be treated as income like wages. This may permit a lower tax rate, unless the extra revenue is invested by the govt in other programs or used to pay down debt.
Long-term capital gains can be a rate that varies on the length of time an investment is held and the amount of capital gain. We do want to stimulate long term investing, but not excessively tax it when sold. For instance, suppose a couple bought a house early in their marriage, and kept it several decades. If they then go to sell it, perhaps 90-95% of the home's value would be appreciation and therefore capital gains. If that was taxed at a high rate, there would be little to show for their lifelong investment.