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Sun Dec 9, 2012, 09:56 AM

No, the capital gains tax is not “taxing the same income twice" [View all]


Whenever the subject of increasing the capital gains tax from its current 15% rate comes up, you’ll invariably hear opponents breathlessly crying, “but that’s taxing the same income twice! Capital gains is double dipping!”

It’s a great line, and has proven powerful in debates. The only problem is, it’s 100% bullshit.

The capital gains tax is NOT a tax on income already taxed, it’s a tax on the ADDITIONAL income you earn by investing that income. For example:
■You earn $100,000. Yay!
■You are taxed 35% on it. Boo!
■You invest the remaining $65,000, you do well, and you double it! Yay!
■You now have $130,000 in the bank. You are taxed 15% for the capital gains, i.e., the $65,000 you made. You pay $9,750.

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http://hlinkoreport.com/2012/12/09/no-the-capital-gains-tax-is-not-taxing-the-same-income-twice/

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Reply No, the capital gains tax is not “taxing the same income twice" [View all]
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