Especially by rules governing the timing of transactions, and also by rules distinguishing one kind from another.
Both should be voided in tax reform, equalizing them in order to establish a level playing field between investment gain and wage gain.
Capital gains held less than a year vs. more than a year? Out. Tax all capital gains at one low rate, regardless of time held. To do otherwise inhibits price discovery.
Capital gains on real estate held less than two years vs. two or more? Out. Tax all such gains at the same low rate as any other capital gain, regardless of time held.
Rates different for unearned capital gains from ordinary earned income? This distinction distorts the one in favor of the other. Both kinds should be taxed at the same low rate in order to discover which makes more sense to the investor at the time, based on market conditions. Government should not interfere with the conditions.
