[wilmington2]

Capital gains come from long term holdings as such much of the gain can be inflation. To tax the full gain at ordinary rates would tax inflation so that the net could be worth less in historical dollars than the amount you started with. Further, the jobs you described are generally with the exception of nursing jobs, ones that do not require a real thinking based skill.

[ancientart]

Capital gains come from long term holdings as such much of the gain can be inflation.

True enough. The problem is that, once one starts making distinctions of this type in the tax code, even for what seem like very good reasons, there's no place to stop. We get a mortgage interest deduction, medical expense deductions, renewable fuels deductions, and then the thousands of special provisions that make taxes such a nightmare and leave so much room for manipulators.

Besides, capital gains income is often not very long term--Hilary's cattle futures, for example. Why should she get privileged tax treatment for income "earned" through this kind of speculation? Treating capital gains differently than regular income just creates way too big a tax loophole. *Maybe* this would go away if only truly long term capital gains were privileged, but I suspect not.