Paco6945

Weekly Market Notes: Milton Friedman vs. Ben Bernanke

Talk about needing to get a clue -- bobbobwhite - it's YOU who needs to get a clue. If I but an investment item for $1,000 and 20 years later I sell it for $1,500 do I have a capital gain? Hardly. In real terms, I likely have a capital loss. Nevertheless, the Feds want to extract a tax on my $500 "gain."

In terms of shorter term gains, unfortunately, the treatment depends upon what the government is trying to subsidize. If the Feds want to encourage investment, eliminate capital gains taxes, as the author suggests. If the Feds want to discourage investment (and economic growth) don't differentiate capital gains from other types of income. At the very least, capital gains should be indexed to real inflation.

Of course, all these issues could be resolved by eliminating income tax and adopting the FairTax.