Originally Posted by houghtam
Absolutely capital gains should be taxed at a higher rate. Incidentally, the Center on Budget and Policy Priorities shows that, according to your statements, you don't really know much about capital gains.
10 Things You Need to Know About Capital Gains
For the bulk of the middle class who do benefit from capital gains, they never get the benefits of the 15% LTCG tax. Why? Because the bulk of the capital gains for the middle class come from two sources:
1.) Real Estate
2.) Retirement plans.
Most people's retirement plans (401s, 403s and IRA), which are every bit as risky as any other type of stock investments are not taxed as LTCG, they are taxed as regular income
. Not just the portion of the investment that was untaxed originally, but the entire amount.
Real Estate, in most places, is also a big gamble (as many found out in 2008), and while gains in real estate are taxed as capital gains, real estate is also subject to property taxes and other taxes which add to the tax burden. Let's not forget interest on mortgages, which seriously erodes any actual gains.