This is one tax I wouldnt mind seeing abolished or made very very small.
The reason being that it hurts people that invest their money as a means of growing the value of it and then turning around and using that grown value to buy a house or something.
Example
I save $400 a month and invest it in something that returns 5.5% per year (400(1+.055/12)^(5*12). After 5 years the value is $27,552.33. If I deducted 15% capital gains from that I'd wind up with $23,419.48
Now if i put this into a mattress that saved the same amount of money i'd wind up with $24,000.
For a long term approach this wouldnt matter because in the 6th year, despite capital gains tax i'd still have made more money.
Now I'm not saying that a capital gains doesn't have its place but for someone who makes 24k a year and wants to save money to buy a house or condo this seems like a reason to not invest my money unless it can earn over 5.5% per year.
Also i realize that I am in the 15% tax bracket (and really I have a long term capital gains tax of 5%) but if i were to make $30,651 a year i'd be paying 15% long term capital gains.
The reason being that it hurts people that invest their money as a means of growing the value of it and then turning around and using that grown value to buy a house or something.
Example
I save $400 a month and invest it in something that returns 5.5% per year (400(1+.055/12)^(5*12). After 5 years the value is $27,552.33. If I deducted 15% capital gains from that I'd wind up with $23,419.48
Now if i put this into a mattress that saved the same amount of money i'd wind up with $24,000.
For a long term approach this wouldnt matter because in the 6th year, despite capital gains tax i'd still have made more money.
Now I'm not saying that a capital gains doesn't have its place but for someone who makes 24k a year and wants to save money to buy a house or condo this seems like a reason to not invest my money unless it can earn over 5.5% per year.
Also i realize that I am in the 15% tax bracket (and really I have a long term capital gains tax of 5%) but if i were to make $30,651 a year i'd be paying 15% long term capital gains.
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