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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth
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To: geode00 who wrote (143714)10/28/2008 3:03:35 PM
From: TimF  Read Replies (2) of 173976
 

The capital gains rate is already at 15%. If you make it 0% how does it benefit the country?

Reducing the taxes on investment increase the expected after tax return on investment, and thus encourage more investment.

Also if you have a tax on investment (15% or whatever), than you often get special breaks, and sometimes get special penalties for specific types of investment. This different treatment of different investments (for example capital gains on most profitable owner occupied home sales are zero) distorts the incentives for investment, encouraging over investment in some areas and under investment in others (because capital is fungible and limited). If the tax is zero, than you don't have different rates for different investments, its all zero.
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