Capital gains verses regular income?

Question

How much more money could the goverment generate if capital gains income (excluding that which is tax exempt) were taxed the same as regular income?

Answer 1

In 2003 (last year IRS statistics are available), individual filers reported about $81 billion in qualified dividends and $294 billion in net capital gains.

The tax savings from these sources of income ranges from 5%-20%, depending on the brackets of the taxpayers. Since most of the gains and dividends are recognized by the rich, the average is more likely to be closer to 20% than 5%. If it were 15%, the total tax savings on dividends is about $12 billion and the savings on capital gains is about $44 billion.

Answer 2

The CG gains tax can not be eliminated altogether, look at the deficit we have already! They used to be taxed at ordinary rates and are set to revert back to this old system in the future. It is good for the economy to have this reduced tax rate, but increased taxes would support governmental spending on social welfare. Often times, taxes may be contrary to public policy and may not make sense, but the government cannot afford to repeal them. At some point when the economy is booming, they may not extend the policy. Corporations currently do not receive a preferential capital gains rate

Answer 3

Capital Gain Taxes should be deleted to increase investments in the United States of America.

Answer 4

Actually if the gain is short-term (holding for less than a year) it is taxed at the ordinary income rate.

Only Long-term gains are given a tax break. This is done to promote investing and thus spur the economy.

Day traders pay ordinary income taxes on their net gains.

Answer 5

Regular Tax goes up to 35%

Cap Gain tax is about 17%

So the Govt will gain about 100% on the tax collected on cap gains now.

Answer 6

Capital gains are taxed at 5% or 15% based on tax bracket. It is less than the regular tax rate and justly so.

Answer 7

The government would probably lose revenue. People would hold on to capital assets, so no revenue there, and the consequent drying up of the capital market would cause the economy to tank, further reducing revenue and increasing the need for government spending.

You need to take an economics course.

Answer 8

A whole lot less!!! Look back in to the history of revenue into the Treasury. You'll see that when the Congress lowers LTCG rates, capital turns over and revenue flows into t he Treasury at greater rates.

Answer 9

Hush your mouth!! Do you realize how badly that would affect investing? It would essentially shut down the entire stock market. I don't think capital gains should be taxed AT ALL!!!

Answer 10

actually last time i checked it is taxed at a higher rate than regular income (or am i having an idiot moment???). i believe they do tax more for what you earn from investments - not less.

maybe i am misunderstanding the question here?