The earlier summary post A Tax Plan for Democrats, included the suggestion of a lifetime exemption of one million dollars for capital gains and inheritance (and gifts) combined.
Much of the response was along the line of: "Why give them anything?" One must understand that this would be much less generous than current law in most cases.
One earlier excuse for lower taxes on capital gains was this picture: John Smith starts a business. It grows substantially over several decades. Finally he sells it. The actual gain in value has happened over a long number of years; he shouldn't be taxed at the rate of somebody who earns as much each and every year.
Of course, this excuses giving taxing the profits of stock speculators at a lower rate every single year.
I think that giving a generous exemption for once-in-a-lifetime capital gains takes care of the alleged excuse without benefiting the stock speculator very much. I also respond to the political side of the pattern of Republican plans. There are the big rich, the 1% of the 1%; then there are tne moderately rich, who include the prominent citizens of most of the towns in this country.
Right now, if you make $467 thousand, you pay the same marginal rate as the family making $467 million, and there are some. Now, the first amount is a healthy sum, nine times the median family income. Still, it is not comparable with the second. The tax table identifies the interests of the two. I am trying to separate thwse interests, not in hopes of actually influencncing those on the lower end of the top any time soon, but with the expectation of destinguishing the levels of benefit from Republican programs.
Okay, proposed:
To allow the first $25,000 of earned income, annually per earner, to be free of taxes.
To allow the first $1,000,000 in inheritance, gift, and capital gains, in a lifetime per person, to be free of taxes.
To tax the remainder at the same steeply progressive rates.
To remove most tax expenditures (loopholes, deductions for expenditures) from the tas system. (Replacing them with the standard deduction and the $25,000 of earned income.
To simplify tax preparation by these changes.