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Cap Gains

Cap Gains

April 13, 2019 9:53 pmComments are Disabled

I’m finishing taxes this weekend. Allow me to go on one of my fun rants.

I get the need for taxes. I do. But what in the hell is the use of capital gains tax?

This is my money. I already got taxed on it when I earned it. Now, I’m investing it. That’s something my government should want me to do. But when I sell the investment, if I’ve made money, I have to pay a tax on it.

Why? It’s hard enough to invest and be profitable doing it. It’s basically gambling anyway. If I’m lucky enough to have beaten the market on something, why am I being penalized for it?

This has to hurt investment because it increases the cost of investing. It also disincentives selling assets which means capital isn’t being allocated to where it would get the most efficient return: it’s being stored inefficiently for longer than it should be.

So, not only does it make me personally angry to be paying a tax on investment profits, it would seem to be bad for the economy as well.

So is it a policy? I’m listening.

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