Cost of taxing investors

Posted Friday, Nov. 30, 2012 0 comments  Print Reprints
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I was amazed at ads during the recent presidential campaign that downgraded persons paying a 15 percent tax rate compared to normal rates. The lower rate is compensation for placing investment funds at risk of loss.

Companies rely upon investors to fund operations and research and development of new products. Investors funds can show a gain or be lost as a bad investment. The tradeoff for taking such a risk is a lower tax rate on earnings that have been invested for more than one year. If the gains are taxed at ordinary income tax rates, there is no incentive to place money at risk. Our economy will grow as long as investors have incentive to take risks.

-- Joe Ferrell, Arlington

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