Offer your thoughts or opinion on the input financial query or topic using your financial background.

Why are capital gains taxed at a lower rate than normal income? 
To me, the lower tax rate for capital gains is largely due to governments encouraging economic activity. Note that investments usually come from your normal income, which is already taxed. Capital gains tax is essentially punishing people who take the extra effort to put their money into work. If the tax rate is high, it would definitely cause people to rethink about investing, thus slowing the general economy down.