Under the American Taxpayer Relief Act of 2012,
the top federal capital gain tax rate was increased to 20 % (up from 15 %) for single filers with incomes above $ 400,000 and married couples filing jointly with incomes exceeding $ 450,000.
Not exact matches
Having said that, the
capital gain rates are pretty low, so we're historically, when you look at
capital gain rates — Jackie could probably talk to this even more historically — but if you're not in the
top marginal
tax bracket, your
federal rate is 15 %.
Adding insult to injury, the puny effective
tax saving to those
tax - filers from the
capital gains partial inclusion (worth $ 7.50 in
federal taxes at the 15 % marginal rate) was only half the effective savings pocketed by the
top 1 %
tax - filers (realized at a 29 % rate) on EACH $ 100 of their
capital gains partial inclusion (which was then applied against a
capital gains flow that was 600 times larger).
These rates must be compared with the
top federal income
tax rates of 37 % on ordinary income and 20 % on long - term
capital gains and qualified dividends, plus a 3.8 % Medicare net investment income
tax.
The
federal government has more than enough money to raise personal
taxes, especially from high income individuals, by reducing some of the following: the small business
tax deduction ($ 3.2 billion), lifetime
capital gains exemption ($ 600 million), donation credit related to gifted securities ($ 52 million), flow - through shares ($ 125 million) and bringing
capital gains tax rates in line with the
top tax rate on dividends ($ 1.25 billion).
Depending on your
federal tax bracket, ordinary income
tax rates can be as high as 37 percent whereas
capital gains tax rates
top out at 20 percent.