Quote:
Originally Posted by freebeard
Something to think about I guess. What happens to individual income taxes?
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They would go up modestly for people like me and a whole lot for people like Warren Buffett (which he recommends). It shouldn't effect people in the bottom 90% much at all since they own very few stocks.
The current capital gains tax rate is 20% over about $440,000. That is less than the 22% tax rate for "earned" income from $40K to $84K.
Someone making $500K at a W2 job pays $150,192 in Federal Income Taxes (30%) That "earned" income also is taxed an additional 15.3% for payroll taxes (up to the $132,900 cap) so that is another $20,334.
The finally tally for $500K in "Earned" income is $170,536 (34.1%)
Someone making $500K on investment income only pays $100,000 (20%)