Capital gains on stocks are taxed at a rate far below wage income.

Evidence

If you buy stock and then sell it at a loss, you can take a tax deduction, which can be used to offset other gains or income. If you sell stock at a gain, you pay taxes on the income—but at the capital gains rate, which is different, and significantly lower, than the one that applies to wage income. — Dorothy A. Brown, The Whiteness of Wealth, 435

Categorization

• DEFINE: Precise mechanism: loss deduction offsets gains, while gains face preferential capital gains rates not wage rates.