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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 infl
by 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 agoYou 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.