One reason we have all the financial speculation and innovation of late is because of those who can try to convert ordinary income to capital gains in order to lower their taxes.
Wrong.. remember that dividends have partial tax exempt status – and they are tied to real production. The financial speculation and ‘innovation’ was an attempt to ‘keep the party rolling’ and the part of wall-street and in part congress etc. You have to hold an asset for 1 year to get the lower capital gains rate (except for houses). There was no ‘converting’ of income to capital gains.. there was just ‘partying’..
