OohPooPahDoo
Gold Member
Maybe I'm not understanding your question, if an investor such as Warren Buffett makes 100 million bucks in a year and 90% of his/her income is from capital gains, then their tax rate is not going to be too far above the 15% cg rate.
Now if you want to propose that the cg rate be raised, then you have to understand that some investment capital will flow out of the country to places where it'll be taxed less. That tax rate is perhaps the most damaging to the economy if you raise it.
If an investor such as Warren Buffett makes $100 Million through a corporation then the corporation is subject to corporate income tax first, which is 35% at that level. Then he as an investor can take that money for himself and pay a personal capital gains rate of 15%. So if the venture makes $100 Million in a year the actual after tax result is $55.25 Million, for a total federal tax rate of 44.75%.
No. The capital gains tax is only paid on realized gains - whereas corporate income tax is paid on net profit, realized or not. And it doesn't apply just to corporations. For instance - you can buy real estate for $10000, sell it for $20000 - and get taxed only 15% on your $10000 profit.
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