Signs of the Times - and a question

[finnbow]

Originally Posted by whell

This also hopefully illustrates how capital gains tax is also a tax on capital. Unless capital is "risked" (invested, converted or utilized) it will be reduced in value. If it is a commodity like gold, it will rise and fall with market value. But even gold gains value with it is utilized as capital and converted to a product. Without creating an environment that incents the conversion of capital, we suppress economic activity and economic growth.

Must a 2% (plus or minus) annual growth rate in GDP be accepted as "the new normal", or can we do better? Can we jump start growth by reducing the cost of taking a financial risk?

I think the answer to both is yes.

Your simplistic and one-sided analysis failed to note that the risk is mitigated somewhat by the ability to write off capital losses against the gains. Also, as any student of investing understands, over the long term, stocks nearly always outperform bonds (and bank interest, of course). Why do we need to sweeten these gains even further?

I'm just not a believer in structuring the tax code to induce people to do certain things in lieu of other things. That's how we ended up with the most cumbersome inefficient tax code in the First World. We have short term CG's, long term CG's, qualifying dividends, non-qualifying dividends ..... and each has a constituency saying that they must have these breaks to keep on investing. BS.