The tax preference for capital gains turns 100 this year, making it nearly as old as the income tax itself. Biden’s effort to target his reform at the nation’s wealthiest taxpayers may change the politics of capital gains reform. But for a century, almost every debate over the capital gains preference has put wealthy taxpayers front and center — and still the preference has survived. But during the first decade of existence, the capital gains preference didn’t need much protecting. The creation of the earned income preference in 1924 raised an issue of fairness that would increasingly threaten the capital gains preference, if only indirectly.

Source: Forbes February 16, 2021 20:13 UTC