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Why does capital gains tax apply to long term stock holdings?
Most well-off people have investments which they have held for long periods of time, often of very substantial value such as a large part of a company.  They also have influence on legislators and officials through various social contacts, lobbyists, and contributions.  They managed to convince these law makers to offer a lower tax on income derived from sales of such investments.  The fig leaf covering this arrangement is that it "contributes to the growth of economy by encouraging long-term investment in new enterprises."