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Notice that I'm talking about capital gains, not income. They are taxed differently. A family making 190,000 dollars a year in normal income and 50,000 dollars
by rm999 18y ago
Notice that I'm talking about capital gains, not income. They are taxed differently.
A family making 190,000 dollars a year in normal income and 50,000 dollars a year in long-term capital gains will pay the normal taxes on 190,000 dollars (as you describe it, with brackets and what-not), and 15% on the 50,000 dollars. A family making 200,000 dollars plus 50,000 in LTCG, however, will break the 250,000 dollar barrier and will have to pay 20% on that 50,000. That means the cost of that extra 10,000 dollars in income cost them 2,500 dollars in additional taxes.
- gnaritas 18y agoHmm.. you're right, I didn't realize cap gains weren't bracketed like income. Still, I have no sympathy, getting nailed for extra taxes because you make more than a quarter million a year is a nice problem to have, I wish I had it.
- xenophanes 18y agoit's stupid to have this huge jump in taxes when you make one more dollar. 5% of the gains on your investments is a big difference.
- gnaritas 18y agoDonate that dollar to charity and deduct it, you're below the cap, easy enough; you're right though, it is stupid.