Juan Motime
This isn't that hard, Tom. The capital gains tax and the capital loss deduction are a matched pair. As Scott put it, the tax is collected on the way up, and the deduction applies on the way down. Fairness is when the two sides of that coin are in balance:
--If the Republicans ever succeed in eliminating the capital gains tax, then there should also be no capital loss deduction.
--To the extent that capital gains are taxed, the loss deduction should exactly balance previously-taxed gains (recapture).
It's a subsidy to the extent that the deduction is greater than the tax.
Got it?
--Robert