End the Seizure of Profits

We like to discuss America as our "land of opportunity," yet far too often that title is stripped away by the juggernaut-like force of the federal government through its means of extorting money from the people. Across the board, people are taxed unfairly, businesses jarred into closure status, and the hope of success is annihilated. Disregarding all these things, the government steps in further to regulate the one independent means of personal success: the stock market. Investors who work hard studying the markets, making the calculations, and placing their money on the line are taxed voluminously for their returns--if any.

Over the years, capital gains taxes have grown to be a significant issue, but the government still seems to relish their net result of each investor's efforts, with tax rates now preparing to soar to a whopping 20% in January. Let's go ahead and examine that prospect for a second: if an investor rakes in a 200% gain, highly likely with the present downturn's eventual recovery, the government moves in. Supposing the stock moves from $3.00 to $9.00 and the investor holds forty shares, his total gain should, honestly speaking, be six on each, and thus $240. But with the government's encroachment, the man who risked his time and money, studying the market before making a final decision, will only receive $192 for his efforts--hardly fair compensation.

Therefore the government should move to cut such outrageous applications of penalties for average people who have found success in the United States in order to foster a view held by the country's founder's and in line with equalized capitalism.

Two arguments tend to prevail during the capital gains tax debate. The first, promoted by those who decry capitalism or have experienced its failures, insists that is is unfair for some to take in such money since not everyone is capable of doing so, and that only the elite dominate the trading market. While the latter may be true, the definition of "elite" should first be considered. Is an American who puts their time and efforts into research and study of the markets truly an elitist, or simply a common person looking for success? Besides the requirement of starting funds, their are hardly any barriers to joining the investment bandwagon, and countless individuals have become successful starting independent of a major firm or company.

Basing their views off of the poor economic state of the present, the other side complains that eliminating the taxes now will only serve to damage the economic situation which we as a nation are in by depriving the government of additional tax revenue. This logic might hold clear, yet one asks why presidents during strong economic times still manage to avoid doing away with the unnecessary rates of taxation. The answer is simple and mind-raking: they do not have to. Surges of cash with the millions of dollars made each day in the markets are enough to make politicians drool with excitement, as such revenue funds their massive projects of wasteful spending on a regular schedule.

If America is to remain a land where opportunity may be found, than its systems of taxation should reflect this. A nation were one's success is regulated is a country where freedom is ever close to extinction.


John Lai

National Alliance Treasurer and Comptroller General