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Capital gains are not always taxed at hugely lower rates . It depends on the amount of the gain . we paid 23.80% on a capital gain and that triggered the amt tax on all other income . I think it worked out to 29% from dollar one
Short vs long..... If your income is derived from Lo g term capital gains, you are paying less than most middle class income on salary.
It's news to those who whine about income tax cuts for the "rich" when they pay far more in taxes than the lower income folks(who are getting screwed lol) yet they're also the ones who who are more likely to put more money into the economy.
Short vs long..... If your income is derived from Lo g term capital gains, you are paying less than most middle class income on salary.
not true . i already told you why . the capital gains rate can run as high as 23.80% on long term gains plus that is likely to trigger the amt on all other income if you hit it making it even higher . we clocked in at 29% from dollar one , not even a marginal rate .
the most popular tax rate was 15% which went up to 72.250 for joint filers and 36,250 for singles . that represents 72% of all tax payers . so even if you are in the 15% capital gains bracket which the wealthy likely are not you are still paying the same thing .
te only exception would be if you can manage to stay in the 15% bracket and fit a capital gain in to . then you can pay zero on a federal level . but it has to fit in to that 15% bracket with all your other income going in first .
15% income tax bracket is $9,326 to $37,950 (single) and $13,351 to $50,800 (joint) is the most common while long term capital gains is 15% for $38,601 to $425,800 (single) and $77,201 to $479,000 (joint).
A person deriving most of their income at the same income bracket as the 15 percentile, would be paying 0% tax for long term gains. A person deriving $479k in capital gains is most likely paying less than a person deriving $479k in pure income.
of course this assumes that those in the 15% tax bracket are buying equities in a taxable account and not a retirement account . that is likely quite rare as most are doing ira's or 401k's if at all in that bracket , so for the most part that long term gain in a taxable account would apply to very few of those in the 15% bracket.
however , studies by michael kitces show even a 1% dividend or distribution in a taxable account over time can wipe out any tax savings by the lower rate
Some highlights:
The top 1% paid more than the bottom 90%
The top 50% paid 90% of all income taxes
The top 0.001% (about 1400 people) paid 3.25% of all income taxes
The bottom 50% paid 3% of all taxes
Discretionary income is heavily taxed. What you are saying is that the 1% have 90% of the discretionary income. Then you present them as heroic? They re-shaped the system to funnel the money upwards - where it stays.Trickle down economics has been proven to be a bad joke.
Northern Europe has a healthy middle class. Their tax yields are highly reflective of that.
USA tax yields are becoming more reminiscent of a banana republic. Americans tend to be rich or poor. The middle class has been decimated by trickle up economics.
of course this assumes that those in the 15% tax bracket are buying equities in a taxable account and not a retirement account . that is likely quite rare as most are doing ira's or 401k's if at all in that bracket , so for the most part that long term gain in a taxable account would apply to very few of those in the 15% bracket.
however , studies by michael kitces show even a 1% dividend or distribution in a taxable account over time can wipe out any tax savings by the lower rate
In the 15% range, typical contribution is about 5% (1-2k per year) which isn't enough to make a difference in the income/long capital ranges posted. One-third of all Americans are putting less than 4% in 401k's. At the 15% income tax bracket, we are talking people just below or below the average income across the nation.... not the typical family (or single) situation to make significant tax deferred contributions to retirement as those in the 15% or even the 20% capital gains brackets.
I will agree though... it is more complicated than this... of course there are exceptions. I derive most of my income from salary and pay about 15-18% income tax but that's with a boat load of exemptions (3 children which are far more expensive than the tax savings). I'm still paying about the same tax rate as someone who is deriving several times my income from long term capital gains (even without any exemptions).
Oh yes.... this of course is on purpose in the tax code. To encourage more investment.... it is the reality. But it is also the reality that income tax alone doesn't tell the whole story especially for lower income ranges.
Discretionary income is heavily taxed. What you are saying is that the 1% have 90% of the discretionary income. Then you present them as heroic? They re-shaped the system to funnel the money upwards - where it stays.Trickle down economics has been proven to be a bad joke.
Northern Europe has a healthy middle class. Their tax yields are highly reflective of that.
USA tax yields are becoming more reminiscent of a banana republic. Americans tend to be rich or poor. The middle class has been decimated by trickle up economics.
Let me guess. C's in High School? Didn't get a strong college education with a 'hard' degree at a good school with good grades? Not seeing 'top performer' in your performance reviews at work?
If you're mediocre, you get paid mediocre.
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