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Comment by krageon | Hacker News Reader

The original capital is not taxed, capital gains is.

Where do you think the original capital came from? When you buy shares of AAPL, you paid ordinary rates on income which you used to buy the shares.

And? You don't pay capital gains on that. You pay it on the increase relative to the original cost to you (which you payed with already-taxed money). Why shouldn't the increase be taxed same as any other income? Or more, actually, since it's not earned by productive labor?

Capital gains arises (on average) when a company grows and thus makes more money. Corporations pay corporate tax on those profits. Why should my share of those profits be taxed again at the individual level?

Additionally, the higher the capital gains tax, the higher the expected returns have to be. Lower capital gains incentivizes riskier investment, which, within reason, is a net positive for society.

Your share of those profits is dividends, not any gains from increased value of the underlying asset.

And I don't think we need to incentivize even more investment, given where things are at the moment. All it does is concentrate more market in the hands of the same people (who already have enough money to throw it around). It doesn't actually benefit the society as a whole, unless your metric for that is some mindlessly averaged metric like GDP.

The original capital almost certainly was taxed. It was earned as income, or via sales, both of which were probably taxed.

https://www.irs.gov/individuals/net-investment-income-tax

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