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So taking an investment risk so that a startup can grow is to be looked on with scorn? You might be posting in the wrong community.

• mullingitover 6y ago
  Really there just shouldn't be any privileged category for capital gains and it should be taxed like regular income, progressively.
  • throwaway201103 6y ago
    Well that's a bit different than your earlier statement that we should "ruthlessly tax" capital gains. Capital gains get a favorable treatment because we want to encourage investment that creates economic growth, but comes with risk of loss.
    • mullingitover 6y ago
      I mean, we ruthlessly tax working for a living, I just don't see why we don't tax speculation gains the same.
      • apta 6y ago
        Two wrongs don't make a right.
  • valuearb 6y ago
    The reason for giving capital gains a preferred long term rate is inflation. If you invest in business for 10 years and double your money, you've made a 7% annual return. But if inflation averaged 7% during that time you actually made zero economic gains. A better way to restore progressively to capital gains is to index them for inflation, and then you can tax them at ordinary income rates.
    • pashamur 6y ago
      Yeah, it was an aha moment for me when I understood the reason for the cap gains / normal tax difference. It makes sense that it's an attempt to index for inflation, although strange that there is only one cutoff (securities held for 1 year taxed the same as the ones held for 10 years); you would imagine some sort of step-down function would make more sense / track inflation more accurately (or indexing directly which is much harder). So maybe different tax rates for 1/5/10/20 years held?
      • valuearb 6y ago
        You don't need different tax rates, just indexing. Lets have a single fair set of rates with progressivity. A rich man in the 35% tax bracket should pay 35% on their capital gains, just as a poor retiree in the 15% tax bracket should only pay 15% on capital gains.