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Capital Gains Taxes

simon77047 Wrote: Oct 03, 2012 11:23 PM
The recipient of the dividend pays taxes on capital gains, it is not called income tax. The capital gains is not given special treatment because it was taxed twice, but because there was an investor who took the risk to invest in the business.

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...