Whats Fair When it Comes to Taxes?

[mlmpetert]

Originally Posted by jdlea

The bolded portion is the main thing I have a problem with. It's fashionable now to complain about the capital gains tax, but I actually have a real problem with it. Here's an example:

Let's say, for instance, I'm able to invest $10k of my after tax income in a given year. In that year I make $1k on my investments and I sell off my stock. I don't think I should then be taxed again because I earned $1,000 after I already paid taxes on the money I invested, and if I am, I certainly don't believe it should be at the same rate as I already had been for earning the money I invested.

Now, that example doesn't address folks like Warren Buffett who don't really do anything other than invest, but it illustrates the issue that lots of normal people could face. So, what would be a solution to this? Progressively tax higher capital gains earners? I'm not exactly sure, but I can tell you if the capital gains tax rises to the same level as my payroll tax, I'll probably be a little hesitant to invest any of my money.

Yeah i hear you and this is something I really struggled with when I was thinking about tax equality. I decided there are 3 types of jobs in this world. Sales, Sales Support and Government. Everything falls under those 3 categories. Investing is sales, youre buying something in order to sell it to someone else at a higher price. So the deciding factor for me is that the gain someone made from selling the business they started or from a stock they sold is effectively income in my opinion, merely by the fact it can be sold. So just like a vender paying income taxes on the bananas he bought with after tax money and sold for a profit I think a investor selling stocks or ownership in a company for a profit should be treated the same way.