>>
>>There are record numbers of people in the stock market right now, both individually and through retirement vehicles. If the capital gains are raised, mutual fund managers will divert their money into less taxing alternatives. This will result in less investment, leading to less capital gains revenue.
>>
>This is my complaint about reduced capital gains on stock transactions in general.
>
>If I go and buy 100 shares of WellEstablished INC, they receive a grand total of zero dollars to invest. Unless, of course, this is a new issue or an investment in GonnaZoom INC. I have (over)simply made a bet that the value of the stock will increase by more than my alternative investment options while the seller feels that his alternative options are better. But in the vast majority of stock transactions, not a dime reaches the actual company.

The company is itself a stockholder. Each transaction affects the overall value of the company.

>If I buy a "used" house and sell it later for a profit I have not contributed to the economy (with the exception of how I use the profit).

Unless you're in the business, you've contributed to a realtor, a title company, an assessor, an inspector, a bank/loan institution plus the costs of any improvements you made to increase the value.

>If I build a new house I have created several jobs and generated other beneficial economic activity.

>I have no problem with reduced taxes for venture capital funding, IPO's, new stock issues, (other than that these options are largely unavailable to the common citizen), new home building, etc. I have no tolerance for reduced taxation for gains resulting from swapping assets that result in no economic activity whatsoever.

There are millions of people involved in the stock market, stockholders, brokers, mutual fund managers, etc. Each stock transaction creates a change in the value of the stock, which may trigger future actions by other stockholders, not the least of which is the underlying company itself. In addition each transaction generates a fee.

>>Its a nasty connundrum for a small-government guy like myself.
>>Raising taxes = less government revenue
>>Lowering taxes = more government revenue