President Clinton cut capital gains rates further in 1997 than G.W. Bush did. Also, President Carter cut capital gains, while Bush senior made no change in capital gains rates but famously raised other taxes in 1990.
Current longterm/shortterm rates range from 15/25 or 15/35, which is hardly "non-existent", especially when you consider that these rates are a double-taxation on resources that were already taxed as income.
So, yes, double taxation. Very similar to the double taxation experienced when taking in taxed business income and using it to pay taxed salaries. It's a repeated net drain on the economy, which occurs almost every time money changes hands.
But let's look at how incentives change when these "double taxes" were removed:
1. No capital gain tax: Encourages speculation because speculation is "tax-free". Prices across commodities, properties, stocks and bonds will all rise, and may result in even more speculation.
2. No dividend tax: Encourages investment into companies who pay out high dividends because dividends are no longer taxed as much. Buying goods for the sake of capital gain would become less advantageous than buying goods because it pays out passive income that is tax free.
3. No corporate tax: Companies no longer store their money overseas as repatriating money from overseas no longer costs any taxes. Encourages investment by companies rather than hiring more workers, paying more wages, or paying out taxes, because further profit from investment is not taxed, but the other three activities are. Encourage creation of more companies (at least on paper).
4. No employee tax: Companies will be able to get more employee per dollar, and encourages companies to hire more employees because they can pay $100000 and the employee will now get $100000 instead of $60000. There will also be the effect of wage inflation; Every company wants to hire more employees.
Of all the double taxation that exists I advocate getting rid of (2) first.
1) Capital gains is not double taxation. You're only taxed on the gain, not the total value of the sale. 2) Dividends are only double tax because of (3).
3) This is actually double taxation. The same income is taxed twice, once when it is earned as profit by the corporation, then again when it is distributed as dividends.
4) Salaries are not included in taxable income, so you're not taxed twice.
Capital gains in general does not involve double taxation. Some examples:
If you buy property for $100,000, and sell it for $150,000, you'll pay capital gains taxes on the $50,000. Here, $200,000 of income is involved and $200,000 is taxed.
Say you invest $100k in a store, and build it up to $100k/year in revenue. You sell it for $1m. The business has no assets to speak of (you lease the space, etc). You're taxed on the $900k. Here $1.9m of income is involved and $1.9m of income is taxed.
Where you do run into double taxation is with corporations. $1m of corporate income is taxed once when it is earned and again when it is distributed as a dividend. But that's because the corporate income tax is double taxation, not because capital gains is double taxation.
Also, there is no double taxation when paying salaries. Say you have $1m in revenue and $400k in expenses (salaries and rent). You're taxed on the $600k of net income, not the $1m in total revenue.
Now, when you buy something with a post-tax dollar, that money will get taxed again, but that is not double taxation. That dollar is counting towards income again when you spend it.
So say in the first example, the buyer made $200k in salary and capital gains, on which he paid 25% in taxes and was left with $150k. He then bought the property from the seller with that $150k, and the seller paid tax on the $50k of capital gains. Say this all happened in the same tax year. So the buyer reported $200k of income, and the seller reported $50k of income. That contributes $250k to the GDP. And taxes were paid on that $250k. No income was taxed twice.
Now compare this to a corporation. Say it makes $1m in profits after expenses. It is taxed 30% on these profits, leaving $800k. It then distributes this $700k via a dividend to its shareholders, who are taxed another 15%, leaving $595k. This example does not involve $1m + $700k of income. Only $1m of income is added to GDP. But that same income is taxed twice: once as corporate taxes and again as capital gains.