Comment Re:Don't worry, Romney... (Score 1) 836
My understanding is that it's this $800K that gets the 15% rate, and the original $200K is not taxed again.
This is correct. However, the investment involved risk, and is good/necessary for the economy to function. This is why investments get a lower tax-rate, to encourage investment, which encourages business which encourages hiring which drives the economy. It's harder to convince someone to take on investment risk if the government limits the up-side. Look at it this way, you invest 200K and you could either lose it all, break even or make a return on the investment - currently if you get a return on the investment, you only get 85% of it and the government takes 15% - but you took all of the risk (there is no risk in working a regular job (W-2 income), you are guaranteed to make your wage). If the government took 30-39% of the return, and still assumed none of the risk, where is the incentive to invest? It's really penny-wise and pound-foolish to consider taxing investment returns like regular income.