Do we want the government to eliminate the Capital Gains Tax?.
One of the major obstacles facing all entrepreneurs in the United States when starting a new business or expanding an existing one is raising capital. What is Capital? Capital is the engine of a growing economy. Here capital refers to money that people invest in a business, yet capital can be money invested in the stock market or capital can simply be a physical investment in a plant, factory, and the forklifts. Investment and entrepreneurship are the heart and soul of a lively economy. There is no other economic task more important than investing one's capital into new ideas and new enterprises. In the type of economic world in which is present today, the opportunity for good returns on a person's money must be in abundance to allure investments in such ventures. Capital gains taxes significantly diminish these returns, therefore reducing the incentives to invest.
A capital gain is simply an income derived from the sales of an investment. Investors are rewarded with this gain for taking the risk of investing their money. These capital gains on your assets are then taxed according to your income tax level and the amount of time you hold the asset before you sell it. Eliminating this capital gains tax would unlock billions of dollars of unrealized capital gains; this will attract entrepreneurial risk taking, which is the basis for economic growth. The opening of new businesses will create several new jobs for all classes of workers. Perhaps the best example is the software giant Microsoft. Although Bill Gates had the brilliant idea, an abundance of capital was required from the risk takers to build the globally dominant Microsoft. Without the risk takers and their capital, over 15,000 Microsoft jobs might have not been created. Seventy-seven percent of all taxpayers that make 75,000 a year or less, hold capital assets; the tax cut would save these middle class tax payers hard earned dollars and encourage them to invest more.