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A few replies. First, I don't believe this is actually an issue for people with 35k salaries as a whole. The vast majority of Americans do not have savings in
by unlinked_dll 7y ago
A few replies.
First, I don't believe this is actually an issue for people with 35k salaries as a whole. The vast majority of Americans do not have savings in excess of $1k let alone the ability to make an investment in the ballpark you're talking about.
Secondly, if this is true - why is the "long term" tax capped at 1 year? And not 10? Or adjusted for the length of an investment? To me the answer is because it's not designed to fix this problem.
- leetcrew 7y agoit's a contrived example to make the math easy. you can get the same outcome with more realistic values by putting the income closer to $40k and decreasing the gain, or you could do the analysis at a higher tax bracket boundary. my point is that it doesn't make sense to naively tax gains as if they were income acquired in a single year. I'm not arguing for/against the specific implementation of cap gains we currently have.