Final answer:
The profit or capital gains from an investment are subject to taxation, not the total investment amount. Low capital gains taxes are used to encourage investment and support economic growth.
Step-by-step explanation:
When considering the statement, If an investment yields a profit, the total investment price will be taxed, it is important to distinguish between the initial investment and the profit gained from that investment. Generally, it is the profit, or the capital gains, that is subjected to taxation, not the total amount of the initial investment.
In the United States, and many other countries, gains from private investment are taxed to encourage savings and investment, which in turn contributes to economic growth. Furthermore, low capital gains taxes have been a method to promote further investment by making it more attractive financially.
It is also noteworthy that a variety of factors can affect profitability on investment, such as changes in energy prices, government incentives, or alterations in the tax code.