[quote=livinincali]The problem with tax policy is it’s used heavily to create social engineering. Capital Gains tax was designed to encourage productive investments which would be good for the economy unfortunately it encourages short term speculation just as much as productive investment. We encourage people to buy houses, to have children, to hand money to wall street 401K money managers, ant the real question is want to do we really get out of that. Does it even work to produce the expected result?
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The evidence says no, it does not work to produce the expected results, particularly with regards to lower income tax on some kinds of investment income. Despite the fact that it has almost become dogma within some cirlces, that capital gains preferences is a good thing, there is no significant correlations with greater investment, savings, productivity, or income growth. Much like the argument that lower tax rates lead to higher tax revenue. There is simply no evidence it works.
