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Capital Gains Taxes

3129 Wrote: Oct 03, 2012 4:56 PM
Another characteristic of capital gains is that while the percentage taken by the government is less, the amount in dollars can be highly significant. If somehow I came into the amount of money Romney pays in taxes in one year, I could probably retire for life. Viva la revolucion.

One of the many false talking points of the Obama administration is that a rich man like Warren Buffett should not be paying a lower tax rate than his secretary. But anyone whose earnings come from capital gains usually pays a lower tax rate.

How are capital gains different from ordinary income?

Ordinary income is usually guaranteed. If you work a certain amount of time, you are legally entitled to the pay that you were offered when you took the job. Capital gains involve risk. They are not guaranteed. You can invest your money and lose it all. Moreover, the year...