Do I smell austerity for the working class?

  • @CodeGameEat
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    1018 hours ago

    They only get taxed on the gain you made on that money. It’s a tax on the additional revenue an investment provides.

    Capital gain tax is already a measure for the rich, since it is only taxes on 50% of the gain. People that can have significant revenues from investments (eg people with money), will be taxed at much lower rate than if they would make that same money through a job.

    Let’s give you an example:

    You have a salary of 100 000$ and have 1 000 000$ in investments. Your marginal tax bracket is 40% (for this exercise let’s also consider there is no additional tax bracket). After tax, your salary is 60 000$. With your investment, you make 10% annually, so that is an additional 100 000$! If it were taxed as revenue it would cost you 40 000$ in taxes, but since capital gain is only taxed at 50%, you only pay 20 000$ in taxes. That leaves you with an additional 80 000$! So even if you’re making the same revenue from your salary than from your investments, you have more money left in your pocket from the money made from an investment than from your salary.

    That’s why it’s considered a measure for the rich, you need to be able to have a significant investment to be able to be taxed at a lower rate than you should.