Post #15354 by DTB on the US Policy board

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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.

Yes, there's a perfectly plausible reason, which is that rationally governments seek to tax income once and not multiple times. Companies pay a lower tax rate on earnings than most individuals, so paying SOME tax on dividends (distributed earnings) or on capital gains (which are related to retained earnings) does make sense, but paying FULL tax on these earnings without accounting for taxes already paid at the corporate level means that you are paying double taxes on earnings.

If one want governments to increase taxes, it would make more sense to increase the overall rates, but still attempt to only apply them once.

dtb

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