The rationale for a low rate on capital gains has always struck me is phony and hypocritical. Low taxes on the income (primarily) of the very rich (obviously) mainly benefits the very rich, who don't need any benefits.
But for those who are swayed by the usual Rightist argument that little old ladies who live on investment income would be harmed, here's my retort (both):
- A cap. Capital gains can be taxed at 15% up to a maximum of (say) $60,000 income; subject to...
- An aged/disabled qualifier.To qualify for a reduced capital gains rate, (capped or otherwise), you'd have to prove, in the same manner as you have to prove to be eligible for SSI, either age (over 65) or disability (inability to work full time for medical reasons).
The argument that without capital gains taxed at low rates investors wouldn't "invest in America" is, I believe, provably ridiculous and false; it is merely a propaganda point for advocates of low taxes on the rich.
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