Long term capital gains vs. income averaging.
Profits due to the sale of anything owned by the seller for at least the full year prior to the sales transaction are granted extraordinary and unjustified tax reductions for their long term capital gain incomes.
I do not argue that incomes of those who continuously reinvest into and strive to nurture their enterprises are MORE worthy but they are CERTAINLY NOT LESS economically worthy than those who choose to “take the money and run”.
Income is income; reduced rates for long term capital gains are unjustified.
There was an “income averaging” provision within our income tax regulations that mitigated progressive tax rate’s excesses when applied to the filing’s year’s taxable income but only IF the filing year’s taxable income was significantly greater than that of the prior year.
This tax reduction rewarded but was not limited to wealthy investors or those that sold their homes. It benefitted lottery or quiz program winners, sport or entertainment figures, inventors or anyone else that hit ANY KIND of financial jackpot within the taxable year for which they were filing an income tax return. It compensated those who were lucky or daring or devoted years for study or practice of their chosen professions.
It was of no particular benefit to those with comparatively level annual incomes; (such as a Buffett, Romney or your mailman).
I advocate elimination of the long term capital gain, tax loophole. If it’s the U.S. Congress’s opinion we need a tax reduction to compensate for progressive tax rates’ effects, I suggest re-enacting what was the superior tax provision, (i.e. the income averaging provision) within our tax regulations.