Taken from that wiki link.
"Real-world practice in the Republic of Ireland has shown that the optimal rate for capital gains tax, as opposed to income tax, may be around 20%, but this is at least partly due to savvy taxpayers holding onto assets in anticipation of tax rates being lowered in the future."
People are always criticizing CG tax. 20% is a substantial amount of money from an investment perspective. Let's say I put up a million dollars. Now, investment just rose by 50%. First off, 50% is a GREAT return. These days you are lucky to earn anywhere near 10% a year, unless you hit a niche. Hell, CD's are paying half a percent. Let alone you are lucky if you don't LOSE money as well. What happens if it drops 40%? You just lost 400K.
Back on track, your 1 million now has a cash out value of 1.5 million.
If you cash out you are getting hit on the entire 1.5
You are now facing a $300,000 tax. That's 20%. You make out with 200K net which is 20% of your initial investment.
You just risked 1 million, made it grow by 50%, and only get to keep 20% of it. Imagine going to the casino and placing $100 on black, hitting, then getting back something like $130. Crazy right?
Go ahead, raise my capital taxes. You will then watch my money sit in the bank and do absolutely nothing for the country other then feed myself.
Long story short, the US is smart enough not to touch CG taxes. It's a quick way to take from rich people, but wealthy people didn't get there being morons. Sure, take it for 2011. Just don't expect your new policy to have the same effect in 2012. You may see LESS than what you saw in 2010.