I wrote yesterday about the generic desire among leftists to punish investors, entrepreneurs, and other high-income taxpayers.
Today, let’s focus on one of the specific tax hikes they want. There is near-unanimity among Democratic presidential candidates for higher tax rates on capital gains.
Given the importance of savings and investment to economic growth, this is quite misguided.
The Tax Foundation summarizes many of the key issues in capital gains taxation.
…viewed in the context of the entire tax system, there is a tax bias against income like capital gains. This is because taxes on saving and investment, like the capital gains tax, represent an additional layer of tax on capital income after the corporate income tax and the individual income tax. Under a neutral tax system, each dollar of income would only be taxed once. …Capital gains face multiple layers of tax, and in addition, gains are not adjusted…
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