Word: investors
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Dates: during 1980-1989
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...year. Often legitimately earned, this money has an endless variety of sources: an Argentine businessman who dodges currency-control laws to get his savings out of the country; a multinational corporation that seeks to "minimize" its tax burden by dumping its profits in tax-free havens; a South African investor who wants to avoid economic sanctions; an East German Communist leader who stashed a personal nest egg in Swiss bank accounts; or even the CIA and KGB when they need to finance espionage or covert activities overseas...
Asked whether an investor usually gets its money back from a bankrupt company, Berry says the chances are generally slim. "Sometimes [the investor] does--most often it doesn't," he says...
...they are now ostensibly taxed at the same rate as other income, capital gains already get favored treatment in two ways. First, they are only taxed when an investment is sold, unlike interest and dividends, which are taxed every year. An ideal free-market tax system would leave an investor indifferent between, say, a savings account paying 10% a year and a stock expected to rise 10% a year. But tax-free compounding means that, for a top- bracket taxpayer the after-tax profit on the stock will be 45% bigger after 20 years...
...other factor makes capital gains different from other forms of income: you can generally choose when to take them. In a world with no taxes, an investor would trade one investment for another whenever he or she thought the new one would be more profitable. In the real world, people hold on to investments they would otherwise trade in order to avoid paying the tax. That makes the economy less efficient. A tax break for capital gains would reduce this so-called lock-in effect. (Although, please note, this is exactly the opposite of one argument usually heard...
...Investor sentiment was wildly bullish then, and far more cautious...