Capital Gains should be lower... actually its shouldn't be there at all. Its double taxation. The govt taxed you on the money when you earned it. Then you invested it and they taxed you again on what it earned.
In some case this statement is true, but in many cases it isn't. A blanket statement simply doesn't fit.
If you invest in stock, and the company you invested in paid income taxes, then some of the gain would be double taxation. But let's say you invest in GE. Your investment increases by 25% and you sell the stock. GE has not paid income tax in recent years because of tax shelters, so your gain has not been double taxed.
Likewise let's assume you buy real estate. It doubles in value and you sell it. You are taxed on the gain and there has been no double taxation.
