First of all, I think it would be beneficial to point out clearly .. that when the government does not collect taxes on something .. they can instead collect it from others, such as lotteries, gasoline, mining, energy surcharges, etc.So, when the government does not collect or collect enough from the long term capital gains and qualified dividends taxation, it is not as if they lost permanently the chance to get more money. They can always go elsewhere to get them ..So, the only thing to talk about is .. is encouraging long term capital gain a good thing for the economy and society .. the answer is simply yes, and governments should encourage it ..