And for myself, I see no reason why my investment gains, which I spend maybe a couple of hours/year on, should be taxed at lower rates than the money I *actually put in work* to earn.

There's a reason that most developed countries including Canada, Australia, Sweden and France (Sweden and France!) tax CG at lower rates to wage income and some such as NZ, Switzerland, Belgium and the Netherlands don't tax them at all. There are also some countries like Denmark that tax at the same high rates but this is for political reasons of social cohesion than for economics - some societies have chosen to weigh one over the other and perhaps this choice is right for them. With higher rates asset holders are deterred from selling at all resulting in the paradox of overall lower tax revenue. There's also a economic efficiency argument against keeping funds in less productive assets that would still trigger heavy taxes if sold.

This why there are attempts in the US to tax unrealized gains - including in Biden's budget - but the complications of this will I think defeat it for the moment.

US Policy FAQ

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