Why do you think the Federal government taxes long-term capital gains and qualified dividends at a lower rate than earned and other types of unearned income?

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asked Dec 1, 2022 196k views

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Jaspero · Answer 1 · 2022-12-07T17:57:32+0000

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The justification for a lower tax rate on capital gains relative to ordinary income is threefold: it is not indexed for inflation, it is a double tax, and it encourages present consumption over future consumption. ... Future personal consumption, in the form of savings, is taxed, while present consumption is not.

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Why do you think the Federal government taxes long-term capital gains and qualified dividends at a lower rate than earned and other types of unearned income?

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