Reply #16: Capital gains taxes [View All]

[Coyote_Bandit]

should be indexed to the purchaing power of the dollars originally invested and the capital gains rate should be tied to the earnings ability of the individual being taxed.

If an investment/asset doesn't yield dollars with the same purchasing power as the dollars originally invested then it ought not be taxed. A long-term investment should not produce diminished purchasing power and also carry a fucking tax. That is a policy that encourages consumption rather than savings and investment.

Someone with taxable annual income in excess of a million dollars a year (or whatever threshold you want to set) ought to have capital gains taxed at a higher rate. A progressive tax rate on capital gains that is based upon cash flow whether for a sigle tax year or averaged over several years of earnings. This recognized that a dollar of gain has more value to a low income wage earner than to someone who has high annual wages.

My opinion is based on several years of work in the financial industry. Among other things, I managed monies and assets held by some of those disabled folks who completely lacked the ability to earn an income. Often their disability benefits are insufficient to provide basic needs. So they face the challenge of making what they have yield enough to provide for them for the remainder of their lifetime. That is a challenge that is almost impossible with a capital gains tax that is not indexed to the purchasing power of the dollars originally invested. It is a problem that tends to cause managers to favor short term holdings rather than long term investments in order to reduce capital gains build up within the account - and that is a strategy that often lmiits returns.

It is wrong to assume that the only folks paying capital gains taxes are the wealthy. They also include disabled folks trying to survive. Average folks who somehow managed to save a few bucks and now find it necessary to liquidate that investment to pay medical bills. Average everday homeowners. Folks who find their property being taken by eminent domain.