The fact that we do not tax wealth but rather income is indeed a sticking point with me(don't read too much into that). You can thank congress for that, very few of them "need" their income and most have already amassed wealth. You do the math. On the otherhand I do not want to discourage investment either. I think this just simply points out how flawed the current tax code is, it's just asinine. That being said, most people who live off investment income are retirement age and their collective asses have already been reamed by the tax man (John Kerry excluded
) It just shouldn't be this complex.
Another point on this is that you have these people with great liquid assets and because of the horrid taxation level they don't use those assets to start new businesses since it is "cheaper" to sit back and make money the cheaper way (investment). The US tax code should encourage new entrepreneurism, instead it discourages it.
Yes I realize you could say investments do/can create new business, however it is certainly not as efficient in this regard.