Sunday, August 21, 2011

@AllAmerinvest (8-21)

Taxing Capital Gains at Ordinary Rates: Evidence Says Do It…So Does Buffet

Why not tax capital gains as ordinary income?

That’s an old chestnut among those of us who believe that the differential between tax rates on different types of income causes more harm than good.

James Stewart has a great piece in today’s NYT asking this question. The usual objection to increasing the rate on capital gains—that’s the money you get when you sell an asset for more than you paid for it—is that it will discourage investment.

And once again, we have a great quote from Warren Buffett:

“I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off.”

By Bob DeMarco
All American Investor

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Original content Bob DeMarco, All American Investor