Debunking Liberal Myths About the Rich and the Capital Gains Tax

[mikegriffith1]

Liberals endlessly argue that the rich are not paying their fair share because many rich people do not pay income taxes but "only" pay capital gains taxes. Many rich people do not work for anyone and therefore do not receive a salary--and thus do not pay income taxes. These rich folks earn their money via capital gains and therefore they pay capital gains taxes.

Okay, well, if you make between $47K and $519K in capital gains, your capital gains tax rate is 15%. If you make over $519K in capital gains, your capital gains tax rate is 20%. This is well above the tax rate paid by most employed Americans. Tax data show that 77% of Americans pay an income tax rate of 15%. If your household income is between $22K than $89.4K, your income tax rate is only about 11% (since the income tax is graduated and the first $21K of household income is taxed at a rate of only 10%).

Anyone can confirm these facts by checking the federal capital gains tax brackets and the federal income tax brackets.

So, rich people who earn their money from capital gains do not pay a lower tax rate than most other Americans--they pay a higher tax rate than most other Americans.

Furthermore, these numbers do not include the enormous amount of taxes that many rich people pay in state and local property taxes, and the rich, unlike most other people, do not get a tax deduction for all of those taxes.

 

[rightwinger]

If you make over $519K in capital gains, your capital gains tax rate is 20%. This is well above the tax rate paid by most employed Americans.

Not for those making $519K in earnings

You need to compare apples to apples in tax rates
15 percent is less than anyone making over $100 k

 

[Donald H]

All the poor people on this forum are going to become rich people some day soon!

Don't lose faith in the American way. People living in socialist countries such as Canada or the Scandinavian countries are 'fake news'.

 

[LordBrownTrout]

All the poor people on this forum are going to become rich people some day soon!

Don't lose faith in the American way. People living in socialist countries such as Canada or the Scandinavian countries are 'fake news'.

Lol!

Secret RCMP report warns Canadians may revolt once they realize how broke they are

The RCMP report authors warn that whatever Canada’s current situation, it "will probably deteriorate further in the next five years."

nationalpost.com

 

[BlindBoo]

The tax rate on taxable income over $44,726 starts at 22%. It is the same rate for short term capital gains. Only Long term capital gains are taxed at the discounted rate. They should be treated as income but it should be amortized over the number of years the investment was held.

 

[mikegriffith1]

Not for those making $519K in earnings

You need to compare apples to apples in tax rates
15 percent is less than anyone making over $100 k

You simply ignored every contrary fact in the OP, such as the fact that tax data show that 77% of American income taxpayers pay a tax rate of 15%. You also ignored the fact that the rich pay huge amounts of state and local property taxes and can only deduct a small portion of those taxes, whereas most employed people can deduct all of them.

Nothing you said changes the fact that people who earn their money via capital gains pay a higher tax rate than most other Americans.

 

[rightwinger]

You simply ignored every contrary fact in the OP, such as the fact that tax data show that 77% of American income taxpayers pay a tax rate of 15%.

You are again mixing apples and oranges

You need to compare similar levels of income and rates paid

Capital Gains does not deserve a lower tax rate. Should be taxed at the same rate

 

[mikegriffith1]

The tax rate on taxable income over $44,726 starts at 22%.

Only for individuals. For household income, i.e., married filing jointly, the 22% rate does not kick in until $89,451 has been earned. I specified that I was talking about household income.

 

[mikegriffith1]

You are again mixing apples and oranges

You need to compare similar levels of income and rates paid

Capital Gains does not deserve a lower tax rate. Should be taxed at the same rate

Wow. Your mindset is mind-boggling. The point, which you apparently cannot or will not grasp, is that in most cases capital gains income is not taxed at a lower rate. The majority American households fall into the second income tax bracket, which has a marginal tax rate of only 12%, and the first $22K of their income is only taxed at a rate of 10%. But if you earn $47K in capital gains, your tax rate is 15%.

 

[LordBrownTrout]

You are again mixing apples and oranges

You need to compare similar levels of income and rates paid

Capital Gains does not deserve a lower tax rate. Should be taxed at the same rate

CGs need to be lowered along with marginal rates.

 

[BlindBoo]

Only for individuals. For household income, i.e., married filing jointly, the 22% rate does not kick in until $89,451 has been earned. I specified that I was talking about household income.

For long term capital gains taxes you used the amount for single filers of over $47,025. Joint filers of long term capital gains pay 0% for that type of income up to 89,250. But then you switched to household income for joint filers when talking about income tax which includes income from short term capital gains.

 

[BluesLegend]

Liberals endlessly argue that the rich are not paying their fair share because many rich people do not pay income taxes but "only" pay capital gains taxes. Many rich people do not work for anyone and therefore do not receive a salary--and thus do not pay income taxes. These rich folks earn their money via capital gains and therefore they pay capital gains taxes.

Okay, well, if you make between $47K and $519K in capital gains, your capital gains tax rate is 15%. If you make over $519K in capital gains, your capital gains tax rate is 20%. This is well above the tax rate paid by most employed Americans. Tax data show that 77% of Americans pay an income tax rate of 15%. If your household income is between $22K than $89.4K, your income tax rate is only about 11% (since the income tax is graduated and the first $21K of household income is taxed at a rate of only 10%).

Anyone can confirm these facts by checking the federal capital gains tax brackets and the federal income tax brackets.

So, rich people who earn their money from capital gains do not pay a lower tax rate than most other Americans--they pay a higher tax rate than most other Americans.

Furthermore, these numbers do not include the enormous amount of taxes that many rich people pay in state and local property taxes, and the rich, unlike most other people, do not get a tax deduction for all of those taxes.

I'll take Democrats LIE for $800 Alex. Look the truth and facts do not exist in the Dem propaganda.

 

[jwoodie]

Capital gains are taxed at a flat rate. Earned income is taxed at graduated rates. Why should they be different?

 

[BluesLegend]

Wow. Your mindset is mind-boggling. The point, which you apparently cannot or will not grasp, is that in most cases capital gains income is not taxed at a lower rate. The majority American households fall into the second income tax bracket, which has a marginal tax rate of only 12%, and the first $22K of their income is only taxed at a rate of 10%. But if you earn $47K in capital gains, your tax rate is 15%.

I almost have to laugh at how gullible the sheeple are. Working class Americans are getting hit with capital gains taxes on the now jacked up home values when they sell. Biden and Dems have vowed to increase the capital gains tax rate under the cover of 'stick it to the rich'. Chicago just tried this crap, knowing the working class were going to get whacked by their stick it to the rich mansion tax.

Meanwhile Dem states are grabbing their share of your home value. Slapping a tax NOT on the gain after the sale, but on the full purchase price. Stepping in and grabbing x% even if you lost money on the house, PAY the Dems.

Democrats are no friend of the working class or the 'rich'.

 

[mikegriffith1]

For long term capital gains taxes you used the amount for single filers of over $47,025. Joint filers of long term capital gains pay 0% for that type of income up to 89,250. But then you switched to household income for joint filers when talking about income tax which includes income from short term capital gains.

Long-term capital gains tax rates for the 2023 tax year​

FILING STATUS	0% RATE	15% RATE	20% RATE
Source: Internal Revenue Service
Single	Up to $44,625	$44,626 – $492,300	Over $492,300
Married filing jointly	Up to $89,250	$89,251 – $553,850	Over $553,850
Married filing separately	Up to $44,625	$44,626 – $276,900	Over $276,900
Head of household	Up to $59,750	$59,751 – $523,050	Over $523,050

Yes, it's a bit tricky to make a comparison. If I'm single with a salary of $50K per year, my marginal tax rate is 22%. If I'm single and earn $50K in long-term capital gains, my tax rate is 0%. But we're talking about THE RICH vs. the average person.

So, let's up the capital gains income. If I'm single and earn $500K in long-term capital gains income, my tax rate is 15%. That's a higher tax rate than any employed person in the second income tax bracket, which has a marginal tax rate of only 12%. The first bracket's rate is only 10%. The majority of taxpayers fall into the first and second income tax brackets.

Thus, at a bare minimum, RICH PEOPLE who get all their income from long-term capital gains do not pay a lower tax rate than the majority of employed persons. And this is not counting the fact that rich people can only deduct a small fraction of their state and local property taxes.

 

[LAUGHatLEFTISTS]

I almost have to laugh at how gullible the sheeple are. Working class Americans are getting hit with capital gains taxes on the now jacked up home values when they sell. Biden and Dems have vowed to increase the capital gains tax rate under the cover of 'stick it to the rich'. Chicago just tried this crap, knowing the working class were going to get whacked by their stick it to the rich mansion tax.

Meanwhile Dem states are grabbing their share of your home value. Slapping a tax NOT on the gain after the sale, but on the full purchase price. Stepping in and grabbing x% even if you lost money on the house, PAY the Dems.

Democrats are no friend of the working class or the 'rich'.

Same old class warfare from the dems to get votes. Their delusional minions will never accept we don’t have funding problem we have a spending problem.

 

[rightwinger]

Thus, at a bare minimum, RICH PEOPLE who get all their income from long-term capital gains do not pay a lower tax rate than the majority of employed persons

How can you compare the tax rate of someone making $50k a year with a billionaire?

 

[mikegriffith1]

How can you compare the tax rate of someone making $50k a year with a billionaire?

Oh, so now you want to narrow the comparison to a $50K per year worker vs. a billionaire.

Okay, if I earn $1B from long-term capital gains, my tax rate is 20%. If I earn $50K as an employee, my tax rate is no more than 11%.

So it is a lie to say that the rich are not paying their fair share compared to average workers. It is just a lie.

 

[BlindBoo]

Long-term capital gains tax rates for the 2023 tax year​

FILING STATUS	0% RATE	15% RATE	20% RATE
Source: Internal Revenue Service
Single	Up to $44,625	$44,626 – $492,300	Over $492,300
Married filing jointly	Up to $89,250	$89,251 – $553,850	Over $553,850
Married filing separately	Up to $44,625	$44,626 – $276,900	Over $276,900
Head of household	Up to $59,750	$59,751 – $523,050	Over $523,050

Yes, it's a bit tricky to make a comparison. If I'm single with a salary of $50K per year, my marginal tax rate is 22%. If I'm single and earn $50K in long-term capital gains, my tax rate is 0%. But we're talking about THE RICH vs. the average person.

So, let's up the capital gains income. If I'm single and earn $500K in long-term capital gains income, my tax rate is 15%. That's a higher tax rate than any employed person in the second income tax bracket, which has a marginal tax rate of only 12%. The first bracket's rate is only 10%. The majority of taxpayers fall into the first and second income tax brackets.

Thus, at a bare minimum, RICH PEOPLE who get all their income from long-term capital gains do not pay a lower tax rate than the majority of employed persons. And this is not counting the fact that rich people can only deduct a small fraction of their state and local property taxes.

Yes, taxes can be tricky some times. For example for single filers a salary of 50K results in taxable income of $36,150, which in 2023 will be taxed at 12%. But even if your taxable income is 50K the tax rate of 22% will only apply to the amount over $44,725 or $5,265. 12% will apply to the $44,725

 

[rightwinger]

Oh, so now you want to narrow the comparison to a $50K per year worker vs. a billionaire.

Okay, if I earn $1B from long-term capital gains, my tax rate is 20%. If I earn $50K as an employee, my tax rate is no more than 11%.

So it is a lie to say that the rich are not paying their fair share compared to average workers. It is just a lie.

Ok
Fair enough

Let’s make the tax rate the same for Capital Gains as earned income
Sounds fair