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by saxonww 2176 days ago
First: I think the tax situation with capital gains is not fair or warranted, and that we should tax long-term capital gains like regular income instead of having a separate 15% rate for it.

That said, your assertion is not true. 15% is higher than the effective tax rate of 10.5% paid by the average single teacher in the US:

Average salary: $60477 [0]

Standard Deduction for single filers: $12400.

10% bracket for $0 through $9,875 == $988 tax. 12% bracket for $9876 through $40125 == $3630 tax. 22% bracket for $40126 through ($60477 - $12400 - $40125) == $1749 tax.

This totals $6367, which is 10.5% of $60477. Less than 15%.

The numbers are different if the teacher is married, has children, interest, etc.

We can discuss whether it's fair. I said above, I think it's not; there's a "minimum overhead" to living in the US that takes up a much larger fraction of $60477 than $1B, regardless of lifestyle. But people act like Bezos et al are just not paying as much as regular people, and it's just not true. $150M is more in absolute terms, and in many cases relative terms as well.

[0] http://www.nea.org/home/74876.htm

2 comments

"Bezos et al are just not paying as much as regular people" they are not! they might pay more at the $ value, but not more of their net worth. If you are making $100k and pay at least $20k in taxes, your net worth should be $20M to be in the same bracket as Bezos!
Why does even capital gains have a different tax rate from dividend. I would fix that first.
I'm not an economist or finance person, so I don't know why we really ended up where we are. I think a lot of people in this thread, and most of the non-investment-wealthy people in the US, would say it's because of lobbying and so forth to let the rich get richer. That may be true. But I am open to the idea that research and modeling points to this being good overall even if it appears to be (or: is) unfair to 'average' Americans.

I'd like to see some (comprehensible to a layperson) discussion about what would happen if all income - wages, tips, gifts, inheritance, interest, dividends, capital gains, etc. etc. - was treated dollar for dollar equally from a tax perspective. I don't understand why it couldn't be, or why it shouldn't be.