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Where does the double come from? Each dollar only gets taxed once... only the profit gets taxed when investing, not the principal, right?
by kazagistar 9y ago
Where does the double come from? Each dollar only gets taxed once... only the profit gets taxed when investing, not the principal, right?
- fortythirteen 9y agoIf you make capital gains tax the same as income tax, then you're making the situation worse for people who invest their actual income over trust fund babies, not better. It places another barrier on hard working people trying to move from middle to upper-middle or upper class status.
- ascagnel_ 9y agoThat doesn't explain how this person would have the same income taxed twice. Taxes are paid on gains, not the return of principal. Income would be taxed, and then the returns from the invested income would be taxed at a later date.
- bradlys 9y agoTaxed when you get your income (income taxes) and then taxed again when you withdraw (capital gains). Traditional 401k and Traditional/Roth IRA allow you to only be taxed once. (Defer income taxes until you withdraw or you take the income tax hit upfront but are not taxed on withdraw)
- gozur88 9y agoThe problem is inflation. Taxes aren't calculated on constant dollars, and it's really not reasonable to tax inflationary gains.