Reply #66: Not just risk. The more passive the investment, as less effort is required [View All]

[AP]

to earn that money, in terms of time committment (for example) than the higher the tax rate should be relative to someone busting her ass, giving up lots of time, and actually putting something serious on the line to get that income.

One of the reasons stock options are so popular is becuase it means people can potentially get income taxed at LTCG or CG rates rather than earned income rates. There are lots of crazy angles to it too. In the late 90s, they weren't really an otion for the janitors. They still had their income taxed at higher rates than the poepe getting the options. Now they're used because these companies have no money and, in a poor employment market, you can force people to work for low wages in exchenge for dream of making it big. In a better economy, these people would have mor choices.