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Letter: Investments and taxes

Published 02/03/2012, West Central Tribune

Investment income is taxed at a lower rate because the government wants people to invest their savings (yes, this money has already been taxed at least once) in businesses of all sorts. Since the failure rate of businesses is fairly high, any investor might lose all his money at any time. Therefore, when a profit is actually made, the tax rate is lower to acknowledge the risk that was taken in earning the money.

Word count: 75

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