At 02:01 AM 8/14/96 -0400, Brad Dolan wrote:
On Tue, 13 Aug 1996, Timothy C. May wrote:
Yes, taxes will _someday_ have to be paid...but many of us are hoping, praying, and pleading for a cut in the capital gains tax rate...at least a rollback to the 22% rate of yesteryear (and 4% or less in states). This huge "backlog" of unrealized capital gains (aka gains on paper, but not yet taxable) is what is being spoken of when people like Jack Kemp and Steve Forbes speak of "unleashing" the capital gains now tied up due to the high tax rates.
Now imagine that I want to make that $100K investment or, more realistically, that I want to invest $100K in my kid's college education. I'm going to have to earn wages of $160K and pay $60K in tax. It would make me cranky if the guy next door could just clip $100K of coupons, tax free, to pay for his kid's education.
While I'm sure Steve Forbes could, I can't think of a moral argument why income from selling stock should be taxed at a rate lower (or higher) than than income from wages.
Perhaps you've forgotten double-taxation. When a company makes a profit, it is taxed at the full corporate tax rate. Paid to a stockholder, it is AGAIN taxed at the citizen's rate. It's a ripoff, and the strange thing is a lot of citizen-dolts don't understand this or understand its implications. It would be fairer to tax either once the corporation, or the individual, but not both. Now, capital gains is merely the effect of increased value that hasn't yet been paid in dividend. It would make sense, therefore, to simply not tax "income from selling stock" since the taxes have already been paid. Jim Bell jimbell@pacifier.com