Capital Gains Taxation

So Mittens has sparked a renewed debate in the capital gains tax rate, and David Frum lies to make a rather bland to bad point sound like a good one.

Capital gains is not a tax on the transfer of capital goods, but on the profits made from that transfer, for which another word might be "income". Since you can adjust for things like improvements made and inflation and if you use the proceeds to purchase something effectively identical, then this tax is a pretty low barrier anyway. House flippers pay capital gains, and that is their fucking income!

If I buy stock for $1000 and sell it ten years later for $1000, I would [should] get to take a loss!

There is one good reason to have a low capital gains tax: retirement. Many retirees live off a combination of social security, savings and capital gains. Of course, for most retirees the capital gains fraction is pretty damned small. Still that is the only good reason, and even that is a non-issue if cap gains are taxed at the same rate as all other income. Wealthy retirees can afford higher taxes just like wealthy not-yet-retired people.

All the encouraging investment crap is just that: crap. If some billionaire is so stupid as to not invest those billions in something because of the cap gains tax then there isn't much to be done (and, frankly, unless it was inherited it is an unlikely scenario). A cap gains rate of 50% would cut a 1 year 15% ROI to maybe 7%, not to -42%. If an investment is worthwhile, it is worthwhile, and except for extreme tax rates (probably including that 50% number) increasing cap gains to match income taxes doesn't do a damned thing to change the math.