Capital gains tax rate is 15% before you take your deductions.
Self employment tax is 28% before you take your deductions.
So a person like Steve Jobs was paid $1 a year salary. Plus $300-400 million a year in stock options.
When he sells his stocks back to Apple he had a tax rate of 15% before deductions.
Or any land developer/ investor/stock market investor etc.... same 15% rate.
Instead of the normal 28% + us average people pay.
Sound fair they should pay a similar tax rate as me.
That's not correct. Capital gains tax is progressive. If you make under 40K/yr, you pay zero. 40K-80K you pay 10%. 80K-460K(ish) you pay 15%. Over 460k you pay 20%.
Wealthy people like Jobs could easily avoid those taxes though. They do not even pay the 20%.
To give an example, you can buy Municipal bonds or funds that give a distribution on tax-free investments, and get a 5% return. A billion dollars in such a fund would give you $50M/year. If you have $10B in stocks, some of them undoubtedly have lost value, so you can sell a mix of loser stocks and winner stocks and effectively have zero capital gains. You can also sell one property, and buy another, and have the gains from the first property cancel the 2nd one out. Basically you can just keep moving money from one thing to another, and it looks like you never made any money at all, meanwhile the total value of what you own keeps going up and up.
The people most affected by this will be :
- People who make between 137K and 400K / year due to raising the Social security cap from 137K to 400K. This is the same stunt Obama pulled, it's wordsmithing because they don't call it a tax.
- People who make over 200K /yr or married making over 250K / yr will have to pay their capital gains tax (15%) plus a 3.8% ACA "Fee". Again, wordsmithing.
All politicians are expert liars. This is a fact.