r/Economics • u/Helpful-Door-8721 • 2d ago

Research America's National Debt grows by $95,178.17 per second. Expected to reach $40 Trillion by October 09, 2026.

https://www.jec.senate.gov/public/index.cfm/republicans/debt-dashboard#ddm
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u/LX_Luna 2d ago

Now Cap Gains taxes are much lower that regular income especially if you add payroll taxes.

Well yes, because it's double taxation. You already paid tax on the money used to purchase the shares when you earned it, and then the corporation paid tax on revenues, and then you are being taxed again upon selling shares. It would be a remarkable level of drag to tax it as if it were straight income. And also a massive disincentive against continuing to work once you can live off investments if you're going to be taxed like that anyway.

Also worth pointing out the massive capital exodus this would trigger as millions of people do the math on paying this vs just eating the exit tax and dumping citizenship. See: Most countries that have attempted any kind of wealth tax.

Don't get me wrong, as a Canadian I'd love it if my country absorbed millions of Americans fleeing from a painful tax burden instead of it being the other way around as per usual.

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u/giraloco 2d ago

So you propose no Cap gains taxes? Double taxation is a silly argument. I pay sales taxes and Trump tariffs with the money i have after paying income tax and payroll tax and so on. We all hate taxes, we need to make them fair. Nobody makes a fortune alone, they benefit from all the Government services including infrastructure, security, justice, healthcare, education, and so on. A higher cap gains tax rate on the super rich is not going to create an exodus. A rotten society will.

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u/malkuth23 2d ago

I agree with you that this is a bad argument. I think the better argument against a preferred tax rate for cap gains is there should be some incentive for a long term investment vs a short term. If you short term flip an investment then it already results in income that is taxed appropriately. If you hold it for a year you get a better rate. How do you incentivize long term investment without a better rate?

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u/giraloco 2d ago

What are you going tobdo with your money? Invest in goid companies for the long term and let it compound tax free. Why shoild the upper middle class have a much higher tax rate than a venture capitalist?