The reason that cap gains are taxed differently is because of inflation.
If you have 10000 in stock, and there's 20% inflation and the price of your stock goes up to 12000, you haven't made any real gains (no added purchasing power) but you have accrued 2000 in taxable gains.
Instead of adjusting returns for inflation, we just reduced the marginal tax rate for capital gains.
If you have 10000 in stock, and there's 20% inflation and the price of your stock goes up to 12000, you haven't made any real gains (no added purchasing power) but you have accrued 2000 in taxable gains.
Instead of adjusting returns for inflation, we just reduced the marginal tax rate for capital gains.