General Discussion
In reply to the discussion: No, the capital gains tax is not “taxing the same income twice" [View all]hfojvt
(37,573 posts)First, I hate the phrase "capital gains tax".
There is no such thing.
There is an income tax. which includes tax on income made from capital gains.
To say "capital gains tax" makes it sound like there is another tax just on capital gains.
Which would be nice, but isn't reality.
Second, income of $100,000 is NOT taxed at 35%. Not even close. The 35% marginal rate does not even start until $357,700 (and that was in 2010), AND that rate only applies to the income over that amount. Taking $100,000 even for a single. childless person (the people who pay the highest tax rates on income) AND assuming no other deductions (I, myself put $6,000 in my IRA which I generally do every year and tax a deduction, and sometimes even a double deduction thanks to line 50 on the 1040) - a single person would pay $19,056 in taxes. A 19% rate, not a 35% rate. Even throwing FICA in there only gets it to 26.65%
Granted, it was just a made up example, but it is one that might make some people think - "35%??!!? taxes are way too high!"