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> losses due to inflation nor losses due to risk, both of which are substantial for capital income but non-existent for wage income. Neither is true. The only
by teiferer 1mo ago
> losses due to inflation nor losses due to risk, both of which are substantial for capital income but non-existent for wage income.
Neither is true.
The only asset class directly hit by inflation is cash. No high net worth person in their right mind holds substantial cash for a longer period of time. If they do, it's a conscious choice and it's not clear why the tax system should help in that situation.
The risk of a wage earner is to lose their employment because the business folds. Just like the shareholder in that business. It's again unclear why the tax system should compensate both differently for this.
- sokoloff 1mo agoCapital gains taxes are assessed on nominal gains not real gains. If I bought $100K of stock in 1999 and sold it in 2026 for $200K, I gained no real wealth from that transaction. What I could purchase today for $200K could have been bought for $100K in 1999 because of inflation. Yet, I’d owe capital gains on the $100K of nominal gain I experienced. This is part of the reason that long-term capital gains are taxed at a lower rate than ordinary income.
- runako 1mo ago> If I bought $100K of stock in 1999 and sold it in 2026 for $200K This is because you invested incredibly poorly. The S&P is up ~500% over that period, plus decades of dividends. Long-term capital gains are taxed at a lower rate because rich people have more influence over the tax code than people who earn most of their income from working.
- tedmiston 1mo agowhoosh