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View Diary: I.R.S.: U.S. Income Inequality Has Reached Record Level (w/Update) (186 comments)

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  •  Mage11an - Long term capital gains taxes (2+ / 0-)
    Recommended by:
    jeff in nyc, Sparhawk

    were raised from 15% to nearly 24% for the top 1%, a significant increase. It is still at a lower level than earned income with a top rate just under 40%.

    Long term capital gains have always been taxed at a lower rate than earned income since the inception of the income tax with the exception of those few years after the Tax Reform Act of 1986, when both rates were capped at 28%. Every member of the G20 taxes long term capital gains at a lower rate than earned income. In some cases the rate is higher than the US, but in every case it is lower than their top rate for earned income.

    "let's talk about that"

    by VClib on Tue Sep 10, 2013 at 07:00:35 PM PDT

    [ Parent ]

    •  Thanks for the clarification (0+ / 0-)

      That is actually a fairly significant increase -- it would be better if it were at the same rate as real income -- but for truly long term capital gains -- i.e., from real investment not just gambling on up or down of the market -- there might be some value in encouraging investment.  The 40% top rate is too low too -- but my own views on this -- that, yes progressive taxation is wealth redistribution and that's a good thing -- are horribly unpopular.

      •  Mage11 - to qualify for long term capital gains (0+ / 0-)

        rates a capital asset must be held for a minimum of one year. So people who are short term traders pay earned income rates on their net gains.

        "let's talk about that"

        by VClib on Wed Sep 11, 2013 at 01:57:23 PM PDT

        [ Parent ]

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