I was always told the reason was to encourage investing, to increase the velocity of money. Interest income from parking your money in the bank is taxed as ordi

I was always told the reason was to encourage investing, to increase the velocity of money. Interest income from parking your money in the bank is taxed as ordinary income; lower taxes on investment income (capital gains) helps make investing more attractive vs parking the money. This may not make a lot of sense right now when interest rates are close to zero, but there was also a time when interest rates were 20%.