Investment Taxes Too High

Jim Pethokoukis on why Mitt Romney’s 15% tax rate is actually too high:

We shouldn’t tax what we want more of. And the real problem with the capital gains tax isn’t the rate or how it is structured, but what is taxed: gains on investments, which are savings put to work. Economists of all stripes have been saying Americans have consumed too much and invested too little over the past decade. So why would we want to tax investment even heavier, as the Obamacrats want to do?

Or put another way, you can use your money to consume goods now, paying a 6%-or-so sales tax in the process, or you can risk your money by investing it and then pay a 15% tax capital gains tax, plus the metaphorical “inflation tax” followed by a 6%-or-so sales tax when you use the money to consume goods. That is raw deal for investors.

One Response

  1. Not to mention that the corporation that returned the investment has already been taxed, so your returns are correspondingly lower.

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