[throwaway-blaze]

IRA contributions are drastically limited to a $7000 cap per year under 50. Whether they should be is another question, and one worth exploring.

Long-term investment is rightly seen as something to be encouraged hence the lower tax rates. You can make the argument that the rate should be more like 0% since the money invested and risked was already taxed most likely...20% is a reasonable value for the market regulating infrastructure provided by gov't entities.

[UncleMeat]

IRA caps are low, but loads of people earning enough that they'd reasonably save more than 7k annually have access to 401ks or similar accounts that raise the annual cap to >30k, vastly more than the typical person is saving.

The middle class isn't taking advantage of low capital gains rates to earn more from their taxable brokerage accounts because they haven't even filled up their tax-advantaged accounts.

[ajross]

There are loopholes to roll all sorts of nonsense into an IRA though. There was a whole news cycle in the 2012 election about Mitt Romney's $4M "IRA" or somesuch. And IRAs are hardly the only shelter from income tax, they're just the most obvious.

The simple truth is that wealth beyond the ~$10M level in the US pays essentially zero "income tax". It just doesn't happen, no one does it. Short term gains are only taxed for small investors who don't know any better.

[WalterBright]

According to Google:

"Entrepreneur Elon Musk announced on social networks that this year he will pay 11 billion dollars, thus becoming the largest taxpayer in the history of the USA."

[sumeno]

Certainly someone we can take at his word, which is why my self driving Roadster flies me to work every day

[ajross]

That was on a sale of Tesla stock that he'd held for much longer than the long term rate threshold. He paid 20% on it, or plausibly less. I, personally pay a higher rate than that. Big numbers notwithstanding, Elon Musk shouldn't be paying less tax than I do, sorry.

[WalterBright]

If you hold stock long term, you will pay the same or less tax.

From Google: "For the 2025 tax year, individual filers won't pay any capital gains tax if their total taxable income is $48,350 or less"

If you've got a smart phone and a credit card, you can buy stock. See robinhood.com

[ajross]

You're dodging, and I know you're smart enough to know how this goes. I don't make money with long term stock, I make salary. I pay >>20% tax on that salary. Billionaries make, statistically, zero salary. All their income is on long term gains. All of it. So billionaires pay 20%, and that only if they're dumb enough not to find other shelters.

You're just saying "Well, that's the way the tax code works". I'm saying "The tax code sucks", and your point is non-responsive.

[WalterBright]

You can invest in stocks, too. Over time, it will pay more than your salary.

If you bought a house, and it goes up in value, that increase will be a capital gain taxed at capital gains rates.