GKirk, capital gains income’s tax discount is unjustified.
A significant and clear benefit to our economy MIGHT possibly
justify additional federal intervention within our free
enterprise system. This tax provision is favorable to a
sub-class of capital gains incomes; it does not clearly or
directly favor or induce incomes be invested or reinvested
rather than spent for other purposes.
If the reduced tax rate was the determining factor as to
investment allocations, there’s no reason to suppose that tax
treatment favoring capital gains induced superior economic
decisions.
Investors’ choices dependent upon their determining the
probability and rewards for success is basic to the concept of
a free enterprise market.
If government’s tax policies are enticing more investment in
some classification of enterprises, it’s logical to believe
that less favored enterprises are less able to attract
investment capital. If that’s the case, government would be
replacing Adam Smith’s described open market’s unseen clever
hand with government’s clumsy thumb on the scale.
That’s completely contrary to the concept of free enterprise
and the wisdom of the market.
When the determining factor that induced a sale is due to tax
policy, the question of a sale’s benefit to our nation’s
economy is questionable. When selling entire or portion of
enterprises or any other assets are marginal decisions based
upon tax considerations, the retaining, nurturing and
re-investment into the enterprise may be of equal or greater
benefit to our nation. Within such cases, a favorable tax
treatment (at very least) denies us of federal revenue and is
equally likely to be of net detriment rather than advantageous
to our nation’s best interests.
In cases where the determining factor to sell was not due to a
tax policy, the sale would have been transacted regardless (of
that tax policy). Profits due to transfers of wealth in
themselves are of no greater or less than any other income
sources’ economic benefit to our nation; income is income.
It is politically unfeasible to eliminate the tax discount for
profits due to sales of residences not rolled into the
purchase of another home but the amounts could be limited to
the median price of a U.S. private residence when the law’s
passed. That “capped” amount could be thereafter annually
adjusted to the U.S. dollar’s purchasing power. Other than
that the unjustified tax reduction favoring capital gains
profits should be eliminated.
Respectfully, Supposn
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