If It Isn’t Broken, Don’t Fix It

If It Isn’t Broken, Don’t Fix It

If It Isn’t Broken, Don’t Fix It In sum, the idea of eliminating the capital gains tax sounds great but at what real cost? It is unrealistic to think that the IRS’s concept of taxing increases in wealth is going to carve out a major exception and allow significant income from capital investments to flow to individuals tax free.

It may be a great promise in an election year, but anyone who looks past the political rhetoric will quickly see that it’s not going to happen in the real world.

Politicians may eliminate the capital gains tax as currently defined, but increase in wealth is going to be taxed in some other way. When you consider that the present method of taxing capital gains is given preferential treatment by being a flat tax at the lowest rate, as noted earlier, any alternative is likely to be a step backward.

Add to that the now-existing certainty for planning and the present ability to defer capital gains for wealth building and you start to appreciate the current capital gains tax environment.