I always thought the reason capital gains are taxed (and more importantly, should be taxed higher) is that most capital gains are essentially rent-seeking in na

I always thought the reason capital gains are taxed (and more importantly, should be taxed higher) is that most capital gains are essentially rent-seeking in nature. As in, they add no further wealth to the system but through successively higher valuations, extract money from it. The reason we do NOT tax capital gains (and shouldn't) at a much higher rate is that to some degree you want investment in the future and also "that some kinds of capital gains are really income in disguise" - ie. that not all wealth creation is appropriately valued through trade (or appropriately timed).