why shouldn't capital gains be taxed at the same marginal rates as regular income?

[dysfunctional press]

one of the most completely immoral aspects of our tax code is that investment income is taxed at a lower rate than income earned through physical labor.

it just isn't right.

[DontTreadOnMe]

1. Silly you!

Rich people need to be taxed less on their profits so they can then let it trickle down to the little people.
Where have you been all these years of American Free Market Capitalism?

Rich people don't have the patience to let the poor trickle money up, that takes too much time.

[islandmkl]

2. i thought it was all working just fine...

till i realized the 'trickle down' i was experiencing was somebody pissing on my head...

[natrat]

3. it benefits the middle class also, sorry

what is obscene though is allowing corporations and 200k + incomes to go so lightly taxed

[dysfunctional press]

4. a big share of those 200K+ incomes have a sizeable proportion of investment income...

middle-class incomes- not so much.

just another reason why capital gains should be taxed as regular income.

[A HERETIC I AM]

7. How do you know this?

a big share of those 200K+ incomes have a sizeable proportion of investment income...

How much is "a big share"? And how do you know what people that make that kind of money have as earned or unearned income anyway? Can you cite an article?

I don't make two hundred grand, not by a long shot. But I know plenty of couples who do, and they are just decent people who make a decent living. Damned few that I know that have that kind of income have very much of it as investment income, if any. They are raising kids, putting away for college for the kids and saving for their own retirement in tax deferred accounts. I think your assumption is a bit of a stretch, frankly.

[Greyhound]

6. No, when you actually look at the numbers, it doesn't.

The benefits to the top .01% outstrip the breaks to the bottom 90%. It gives the illusion of benefit without actually accomplishing anything.

IIRC, the break even happens in the 98th percentile, hardly equitable.

Beyond the numbers how can you justify not taxing income for which nothing was done at a lower rate than that which is gained through exchanging our limited lifespan?

[A HERETIC I AM]

5. 2008 Tax brackets and rates.

                                  2008 tax rates and brackets 

                                        For single taxpayers
	
If taxable income is at least . . .         But not more than . . .          Your tax is:

$0                                               $8,025                10% of the amount over $0
$8,026                                          $32,550                $802.50 plus 15% of the amount over $8,025
$32,551                                         $78,850              $4,481.25 plus 25% of the amount over $32,550
$78,851                                        $164,550             $16,056.25 plus 28% of the amount over $78,850
$164,551                                       $357,700             $40,052.25 plus 33% of the amount over $164,550
$357,701                                       No limit            $103,791.75 plus 35% of the amount over $357,700

                                  For married couples filing jointly*
	
If taxable income is at least . . .        But not more than . . .           Your tax is:

$0                                           $16,050                     10% of the amount over $0
$16,051                                      $65,100                  $1,605 plus 15% of the amount over $16,050
$65,101                                     $131,450               $8,962.50 plus 25% of the amount over $65,100
$131,451                                    $200,300                 $25,550 plus 28% of the amount over $131,450
$200,301                                    $357,700                 $44,828 plus 33% of the amount over $200,300
$357,701                                    No limit                 $96,770 plus 35% of the amount over $357,700
* Or qualifying widow or widower
	
                              For married couples filing separately
	
If taxable income is at least . . .     But not more than . . .                   Your tax is:

$0                                          $8,025                         10% of the amount over $0
$8,025                                     $32,550                   $802.50 plus 15% of the amount over $8,025
$32,551                                    $65,725                 $4,481.25 plus 25% of the amount over $32,550
$65,726                                   $100,150                   $12,775 plus 28% of the amount over $65,725
$100,151                                  $178,850                   $22,414 plus 33% of the amount over $100,150
$178,851                                  No limit                   $48,385 plus 35% of the amount over $178,850

                                   For heads of households
	
If taxable income is more than . . .    But not more than . . .                   Your tax is:

$0                                      $11,450                           10% of the amount over $0
$11,451                                 $43,650                        $1,145 plus 15% of the amount over $11,450
$43,651                                $112,650                        $5,975 plus 25% of the amount over $43,650
$112,651                               $182,400                       $23,225 plus 28% of the amount over $112,650
$182,401                               $357,700                       $42,755 plus 33% of the amount over $182,400
$357,701                               No limit                      $100,605 plus 35% of the amount over $357,700

Short term Capital Gains (short term means the security was held less than one calendar year before sale) are typically taxed at 35%.
Long term Capital Gains (long term means the security was held 366 days or longer before sale) are typically taxed at 15%.

I use the word "Typically" because if you are in the 10% bracket and you have a short term gain, it is taxed at 10% unless the gain pushes you above the next bracket threshold. (Tax preparers, please correct me if I have that wrong)

The above tables are from http://articles.moneycentral.msn.com/Common/Taxes/2007TaxBrackets.aspx