In one sense, I kinda like the idea of long term capital gains being taxed at a lower rate.
1 Provides opportunity for stability of share price, which then allows for companies to estimate future needs
2 Keeps people in the game longer, again provides opportunity for stability and might allow for reduced stress level
3 Gives incentive for people to know they have some 'skin in the game' that a longer term investment can provide...am a fan of of more people having skin the game as it can provide a sense of unity or 'shared status'
4 Getting people to prepare for the future is tough enough as is, giving a little incentive by the 'system' can help people chart a course for themselves, and a little sense that they are directing their life will add meaning to it (well, it may add meaning to some people's lives and for others who believe in fate, well, nothing can add/subtract meaning because it is or isn't fated).
What I found most strange about long term capitol gains is how a person can save a crazy boatload by inheriting stock. Mom buys 100 shares of Apple in 1985 for $5 a share (example) and then just sits on them until she dies. Offspring inherits the stock in 2020 and then sells all 100 shares at $500 per (example). Offspring's price basis for determining capitol gain is the price per share in 2020. So if mom died when share price was $499 (example), offspring pays tax on $100 gain. The other gain is not considered. Maybe this angle should be looked at.
