Mitt Romney's Teachable Moment on Capital Gains - Forbes

Mitt Romney's Teachable Moment on Capital Gains - Forbes: taxing capital gains at much lower rates than other income creates a ginormous loophole that leads to a tremendous amount of inefficient tax shelter activity. Virtually every individual income tax shelter is devoted to converting fully taxed income into capital gains. If you can transform $10 million of wages into gains, you can save over $2 million. With that kind of payoff, there is a whole industry devoted to inventing schemes to generate current deductions to shelter the wages and ultimately recoup it years later as lightly taxed gains. These shelter schemes entail an economist for at least two reasons.