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The quick and simplistic answer to the silly question is, the money that is earned and taxed at 15%, has been taxed once prior to capital gains taxes.
That means it has been taxed a second time at the 15% capital gains tax.
The corporation has been taxed on profits, then the individual is taxed on realized capital gains.
Being that the corporation is a fake person that the government allows to be construct to defer liability, that "person" pays taxes on it's profit, then when it pays you a dividend, you pay tax on it.
This is another one of those CONSTANT MANTRAS of the right that are so flawed at their very core, but they continue to beat to death ad infinitum. You want the corporation to absolve you of liability, but you want to be paid as if you are an owner with liability.
It's ridiculous that Capital gains are taxed lower than earned income from work.
They get another job. Or a better job. Or a roommate. Minimum wage was never meant to be a wage that you raised a family, or spent your entire life earning.
In the minimum wage world, work schedules (esp in say fast food) change weekly, putting workers with two (or more) jobs with scheduling conflicts. I once was scheduled to be at two jobs at the same time on a holiday, and had to choose which job to give up.
I've had roommates, I have roommates now. It's a great way to have what little you own ripped off.
The corporation has been taxed on profits, then the individual is taxed on realized capital gains.
Being that the corporation is a fake person that the government allows to be construct to defer liability, that "person" pays taxes on it's profit, then when it pays you a dividend, you pay tax on it.
This is another one of those CONSTANT MANTRAS of the right that are so flawed at their very core, but they continue to beat to death ad infinitum. You want the corporation to absolve you of liability, but you want to be paid as if you are an owner with liability.
It's ridiculous that Capital gains are taxed lower than earned income from work.
Absolutely right, cut out the taxes to the fake people called corporations and tax the capital gains at 40%
It's because you're confused about what the word "earn" means.
Their overall rates are lower because they make most of their money from investments, not wages.
You WANT wealthy people investing their money. That job you "aren't fundamentally complaining" about would likely disappear without those evil rich people pumping their cash into the economy.
What a load of crap. They don't just "invest" their money. Rent seeking in the FIRE sector is more like it. What would disappear is inflation without this kind of wealth. His income tax is at least a sign that he is involved directly in production( if he is not making it from a Hedge fund). You think he would not pump his money into an investment keeping more wages?
Abolish the income tax or start it off at 1 Mill so we don't have any of that clever accounting shifting sleepy time money into a "salary".
The 33% tax on the profit is already built into the price of the stock, so right there your entire post ceases to have merit. You don't get taxed 33% on the 10% increase, you get taxed 15%.
Now, someone who makes $100K going to work everyday gets taxed at twice that rate, which is an absurd situation on its own, but again, another victory of the Reagan "Revolution" that transferred so much wealth up the chain, and continues to.
The ignorance in your post is the stuff of legends.
I'll clear the air.
The Marginal Rate - 33% in this case - is just that. The rate on the margin of income above the income level that it applies to and only that marginal income.
For example, if the 33% rate kicked in at $50,000, and you earned $52,000 in taxable income, only $2,000 of that income is taxed at 33% - not the whole income. Income below the cutoff point is taxed at the lower rate(s).
If you take your total tax paid, and divide it by your gross income, you will get your effective tax rate. In the case the OP states, I suspect it amounts to about 12 - 14%. This is due to the fact that most of the income is taxed at the lower rates, plus the reduciton due to standard exemptions and standard deductions.
Now as far as Capital Gains Tax.
All modern societies, or most, if not all, have a special tax rate for income accrued through the investment process, and it is done for two extremely good reasons.
First, investment is a risky business, and often times, the investments not only don't return much profit, but shows a loss, and sometimes a complete loss. That risk is offset by a lower rate.
Second, thinking people, know that it is in societies best interest to encourage investment, inasmuch as it greatly enhances the economy. Hence the lower rate on that type of income. BTW, it is available to anyone who choses to be proactive enough to make investments, instead of cigarette butts and empty beer cans.
But then the government collects no tax revenue unless dividends are distributed or stock is sold.
Nice try though.
Then choose one, no tax and tax the end recipient, or keep it the way it is, but it's ridiculous to suggest that it should be taxed at the corporate level, or business level, and then a second time at the capital gains level, and state that the money isn't being taxed enough.
In the minimum wage world, work schedules (esp in say fast food) change weekly, putting workers with two (or more) jobs with scheduling conflicts. I once was scheduled to be at two jobs at the same time on a holiday, and had to choose which job to give up.
I've had roommates, I have roommates now. It's a great way to have what little you own ripped off.
Either you are not earning minimum wage now, or wasting valuable time and effort here.
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