Capital gains income can be taxed at lower rates than wage income.

Evidence

Tax computation by author: . (9875 - 0) +. (40,125 - 9875) + . (85,525 - 40,125 + . (150,000 - 85,525) = 30,079.50. The taxpayer's marginal tax rate (the rate at which her last dollar of income is taxed) is 24 percent, while her first dollar of taxable income is taxed at 10 percent. Here the taxpayer has no capital gains income, but if she did, the first 40,000 of it would be received tax-free, and the balance would be taxed at a flat rate of 15 percent because her taxable income is less than $441,450 because she is single. — Dorothy A. Brown, The Whiteness of Wealth, 831

Categorization

Category: Causal Relationships

Related

• Capital gains rates reward income from wealth over labor (similarity 0.86)
• Capital gains on stocks are taxed at a rate far below wage income. (similarity 0.85)
• The tax code taxes investment income at a lower rate than wage income (similarity 0.80)
• Every rationale for the low capital gains rate fails on historical and comparative evidence. (similarity 0.80)
• The 1986 act taxed capital gains and wages equally (similarity 0.79)
• Marginal tax rates apply only to the last dollars earned, not all income (similarity 0.78)
• The richest 5 percent of taxpayers receive 85 percent of preferential capital gains income. (similarity 0.78)