Talk:Capital gains tax in the United States

message: I know you liberals don't want to expose how much taxation occurs in the USA. (Liberals = 90+% of wikipedia editors.)
But, Wikipedia is sort of...you know...an encyclopedia.
So, how about SPECIFICALLY STATING what the tax is on Short-term capital gains?
Thanks! —Preceding unsigned comment added by 71.238.68.127 (talk) 22:00, 25 November 2007 (UTC)
replies: text: The article in fact states the tax rate: "Short-term capital gains are taxed at a higher rate: the ordinary income tax rate."EECavazos (talk) 22:47, 25 November 2007 (UTC)
replies: text:  You damned liberals and your whole Constitution thing.74.73.108.93 (talk) 00:44, 10 December 2007 (UTC)
thread_title: Short-term capital gains

message: Under the criticism section there is a pretty gratuitous plug for the Libertarian Party. There's really no reason for it to be there, but as long as it is, I will make sure the socialist position stays there as well.
I don't really know how to make external links as the Libertarian editor did, but if someone feels they should be there, here are some American Socialist parties that could be linked to:
Democratic Socialists of America
http://www.dsausa.org/dsa.html
Socialist Party USA
http://www.sp-usa.org/
World Socialist Party (USA)
http://www.wspus.org/ —Preceding unsigned comment added by 71.108.14.52 (talk) 05:03, 17 April 2008 (UTC)
thread_title:  Libertarian soundbite? 

message: The page indicates that LTCG for those in the 10% and 15% ordinary income brackets would pay 0% in long-term capital gains taxes, but the IRS website indicates that this rate is 5%:
http://www.irs.gov/taxtopics/tc409.html
Can someone explain why this rate would be 0%? Am I missing something here? —Preceding unsigned comment added by 192.147.58.6 (talk) 13:57, 29 August 2008 (UTC)
thread_title:  LTCG for the 10 and 15% tax brackets 

message: Alternative minimum tax can raise capital gains rate beyond what is stated in article if you have a large sale (selling your home for example). Article is misleading and incorrect in stating the rate is 15% (in case of AMT). 71.131.18.214 (talk) 16:15, 25 October 2008 (UTC)
thread_title: Alternative minimum tax can raise capital gains rate, article is incorrect in this situation and misleading

message: I'm preparing an article in another encyclopedia, and I need information on how the capital gains tax rate affects tax revenue. I heard somewhere that "raising" the capital gains tax (i.e., increasing the percent from say 20% to 40%) has been advocated by some on the grounds that the rich should pay their fair share. Others have said that raising the rate paradoxically lowers tax revenues, because investors defer sales to avoid the tax when they think it is too high.
Is there enough historical data to let the reader decide whether this theory makes sense? That is, has the CG tax rate ever been raised so quickly (or so high) that the tax revenue it generated went down? Or has the rate ever been lowered, leading to (paradoxically again) an increase in CG tax revenue? I think Newt Gingrich was advocating something like that.
Also, what do various economists say about the effect of changing the tax rate? --Uncle Ed (talk) 11:49, 16 March 2009 (UTC)
thread_title: "Fair share" and net tax revenue

message: For starters, how on earth is http://www.huppi.com/kangaroo/L-capgainsspur.htm considered a worthwhile source? The rule in Reliable sources is "an established expert on the topic of the article whose work in the relevant field has previously been published by reliable third-party publications..", which doesn't seem to be fulfilled, here. 68.73.99.92 (talk) 06:03, 27 March 2009 (UTC)
thread_title: Sources

message: The counterpoint in the double taxation section (i.e., that wage earners pay multiple taxes as well, since their employers pay it before paying them) is both unsourced and wrong. Wages paid to employees is a business expense; thus, this is not a good example of another form of double taxation.
There are other reasons why the tax code exists as it is (for instance, in corporations, higher taxes are the price levied for the privilege to gainfully participate in an enterprise while not assuming any of its legal liability beyond the amount invested), and perhaps they should be mentioned. I'm not going to put them in because I don't have a good enough background to source anything, but I'm throwing this out to anyone who might. —Preceding unsigned comment added by 71.48.212.222 (talk) 04:41, 15 April 2009 (UTC)
thread_title:  double taxation? 

message: Please elucidate the following bullet:
:After 2010, the qualified five-year 18% capital gains rate (8% for taxpayers in the 15% tax bracket) will be reinstated.
Does this mean that capital gains on assets held longer than 5 years will be taxed at only 18% rather than 20%?
Thx. —Preceding unsigned comment added by 67.9.180.133 (talk) 22:37, 12 June 2010 (UTC)
thread_title:  Please Define "qualified five-year 18% capital gains rate" 

message: And, it should be removed to an appropriate forum for discussion of opinions, or else complemented with discussion of all tax issues, such as the fairness of Cap. gains rates being so much lower than the ordinary income rates applicable to earned income. —Preceding unsigned comment added by 66.167.95.10 (talk) 21:50, 31 December 2010 (UTC)
thread_title:  The "Opinions about tax is correctly labeled POV, and non-encyclopedic 

message: *The only instance where a capital gain can be considered "income" is where a mutual fund which one invests in sells stock held in that mutual fund, adds the gain from that stock sale to the value of the mutual fund, at which point the investor sells his mutual fund. The additional value for which that investor is selling his mutual fund shares are considered a "profit" but still taxed at capital gains rates. So really even in this instance, there is not income, but rather a Capital Gains "Profit". Please anyone elucidate if you have other thoughts, otherwise I am changing that entry to omit the use of the term income in relation to Capital Gains. Here's the passage I changed -- "pay income tax on the net total of all their capital gains just as they do on other sorts of income" 10stone5 (talk) 06:07, 11 August 2012 (UTC)
replies: text: For federal income tax purposes, which is what we're talking about here, a capital gain is "income". That is, a capital gain is included in "gross income" under Internal Revenue Code section 61. A capital gain is a kind of "income." Famspear (talk) 14:07, 11 August 2012 (UTC)
replies: text: Oh, and just to be clear, the distinction that you tried to raise regarding the word "profit" is also incorrect. Famspear (talk) 14:09, 11 August 2012 (UTC)

text: Background: The federal income tax law generally divides "income" into two categories: "ordinary income," and "capital gains." Subject to some exceptions not material here, the general rule is that if you buy stock in, say, ExxonMobil or IBM for $100 and you later sell it for $120, you have a $20 realized capital gain, which is includible in "gross income" under Internal Revenue Code section 61(a)(3), as a "gain" from a "dealing in property." The term "profit" is just another term that you could use to describe the gain. Famspear (talk) 14:20, 11 August 2012 (UTC)
thread_title: A Capital Gain is Not Income

message: Most US states impose their own Capital Gains Tax on top of the federal CGT.  Seems that an article about "Capital Gains tax in the United States" ought to at least acknowledge this.  Grover cleveland (talk) 03:52, 16 September 2012 (UTC)
replies: text: All significant reductions in the long-term capital gain tax rates have preceded a recession by one to four years. http://www.cch.com/wbot2012/029CapitalGains.asp
For some reason, Arzel removed this leaving only an implausible edit comment: "Not a RS, plus "significant" is weasel in this sense.  Correlation without causation trivia". I'm StillStanding (24/7) (talk) 04:03, 27 September 2012 (UTC)

text: Its probably not a RS, but the information in the chart could be found in a RS, so it's not a big deal.  However Arzel is correct about this implying correlation without cause.  Find an RS that makes this case.  little green rosetta 04:10, 27 September 2012 (UTC)
replies: text: "Significant" is a statistical term in this sense, however ther is no statistical analysis in the source that would dictate what a "significant" recession is.  As it is the editor defined "significant" to fit the outcome.  It is quite clear when you look at the source that the author simply looked for all the reductions in capital gains and then counted the number of years until there was a depression and then said there was a "significant" link between the two, however there is no analysis to back up the claim.  Also, the biggest recession of all, the great depression, does not follow the pattern as rates had not changed for a number of years (according to the chart) before 1929, and then rose after 1929.  If anything the chart shows that the increase in 1933 delayed the recovery from the great depression.  I find it depressing that ISS would restore this.  Arzel (talk) 19:24, 27 September 2012 (UTC)
replies: text: "Significant" referred to the reduction in the Capital Gains Tax not a "significant" recession. As for the change in 1933, that occurred during the Great Depression and obviously shouldn't be a factor in this discussion. While I never said there was a link or cause and effect between CGT reductions and recessions, it should be noted in the article as politicians claim that lowering the CGT brings on prosperity. ----Cgersten 22:59, 27 September 2012 (UTC)
replies: text: Right, the issue here isn't whether we can show that the correlation comes from causation, only that reliable sources note the correlation. I'm StillStanding (24/7) (talk) 05:52, 28 September 2012 (UTC)
replies: text: My left knee hurts when it rains, so obviously my left knee is correlated with rain..that must mean something?  Right?  You both do realize that the source being used is just a table, ISS I don't know when you took to supporting original research.  Arzel (talk) 13:54, 28 September 2012 (UTC)
thread_title: State CGT

message: This page needs to be updated to reflect the American Taxpayer Relief Act of 2012 ("ATRA" or H.R. 8). I hesitate to edit directly since I haven't actually read the legislation.
Ginahoy (talk) 02:13, 5 January 2013 (UTC)
thread_title:  Page needs to be updated to reflect new law 

message: I think much of the language in this article needs refining. There is no need to advertise sources in the text: "According to USA Today (“New rule puts a wrinkle in figuring taxes on stock sales” by Mark Krantz published February 13, 2012 page 6B)" in the History of capital gains section, "the conservative newspaper Human Events" in the Rationale section, "In an article in the Washington Post" in the Primary residence section, "According to an article in the Washington Post" also in the Primary residence section, etc.
The sources should be available in the refereces section and the text uncluttered by details that aren't relevant to the subject (i.e., what matters is what was said, not where it was said). 69.174.87.108 (talk) 18:27, 30 January 2013 (UTC)
thread_title:  Language 

message: I've repeatedly heard that there is some persistent effort to return the holding length for long-term capital gains to five years back from one, in the U.S. However, I can't find any reference to this in anything other than oblique mentions in blogs and other low quality sources. Does anyone have a good source? Neo Poz (talk) 03:31, 22 February 2013 (UTC)
thread_title:  Proposals to reform the long-term term length? 

message: 1. First graph has a start date of 1972 to push a certain agenda to imply the tax rate has always been declining. Ignores lower rate from 1954 to 1967. Also, is not updated to include 2013 tax rate
2. Much criticized crs study which lacks basic econometric and theoretical frameworkSabote88 (talk) 10:05, 25 February 2013 (UTC)
replies: text: You don't like the one which starts at '72 because it only shows decreases, but you also don't like the one that starts in 1950 because it has growth rates on it? Whatever your problem is with the study it came from, its data is correct. Neo Poz (talk) 12:39, 25 February 2013 (UTC)
thread_title:  Problem with the graphs 

message: I removed one sentence from the section Primary residence, as its footnote had been reported as a dead link.  It described deferring capital gains tax using 1031 and laid out a strategy that did not seem much different from the strategy described in the preceding sentence.
Now about the surviving portion of the paragraph.  A claim is made that use of 1031 "can avoid capital gains tax entirely," presumably by converting properties from primary residence to rentals and vice versa, but it doesn't say how.  My only guess is that, by moving into a former rental property, you will not have to pay cap-gains simply because you plan never to move out.  However it does it, it doesn't belong in this section, as Wikipedia says 1031 exchange doesn't apply to personal residences (nor to second homes).  And this section claims to be about 26 U.S.C. §121, which the paragraph says is not available to properties acquired in a 1031.  Spike-from-NH (talk) 22:30, 8 October 2015 (UTC)
replies: text: 1031 exchange says personal residence can be used in 1031 exchange if rented out for 2 years just prior to exchange to delay capital gains tax. DrElgin (talk)  —Preceding undated comment added 17:08, 22 July 2017 (UTC)
thread_title:  1031 exchange 

message: Substituted at 10:51, 29 April 2016 (UTC)
replies: text: I did some work this year to make sure that historical information was under History rather than in the Intro.  However, the article would be still better if the reader saw what current law is without having to scroll through a discussion of how it got that way, which I'll do now.  (No objection to deprecating the subpages.)  Spike-from-NH (talk) 12:34, 29 April 2016 (UTC)
thread_title: Assessment comment

message: The section Rationale has multiple problems.
*The sentence "The 2007 capital gains tax revenue of $123 billion was equal to 75% of the Fiscal Year 2007 budget deficit." is a relationship without meaning and I have deleted the sentence.  This figure might also be 75% of the amount Americans spend on cigarettes or movies.  A deficit of $170 billion seemed huge under Bush, but we have seen deficits much higher since 2007.  If the implication is that higher tax rates could reduce or close the deficit, we don't know that.  No Member of Congress has been voted out because of high deficits, so raising more revenue and promising to "apply it to the deficit" assumes all other things are kept equal, when in fact there is a large wish list waiting for that funding, which might be a larger political positive than the deficit is a negative.
*The lede is, "the lower tax rate of long-term capital gains meant $38 billion more in the hands of the consumer."  We don't know that either.  Taking long-term capital gains tax receipts and factoring in the rate for ordinary income produces a figure of "foregone revenue" but that assumes revenue is linear and no one would respond to the higher rates by deferring asset sales or other avoidance.  Surely if Congress changed the 15% rate to 150%, the government would not get ten times as much revenue.  The source is an article from a liberal website whose title references "Tax Expenditures" (that is, that any lowering of anyone's tax rates is tantamount to leaving money on the poker table).
**As for "the hands of the consumer" (which Anon today changed to "the hands of wealthy Wall Street executives" and  helpfully reverted), this is biased (as many of us would rather help the consumer rather than the government) but Eric's revert rationale is correct, that a subsequent sentence clarifies that the incidence of the tax falls on payers with higher incomes (though they are consumers too).  I'll write "the taxpayer" rather than "the consumer" and let the clarifying sentence clarify.
***(Seeing no feedback, I have now deleted the sentence and will work on a more balanced introduction.  14:36, 3 May 2016 (UTC)
thread_title:  Rationale 

message: edited the section Carried interest, adding a citation on Warren Buffett and stating in the Edit Summary, "hedge funds don't make carried interest."  (Regardless, the tax treatment is still referred to as the "hedge fund loophole.")  I don't know whether they do or not, but the Marois/Alesci (Bloomberg) citation says they do.  I welcome proof or comments by more knowledgeable editors but have restored the assertion in the meantime.  If we agree that hedge funds do not get the carried interest treatment, then the previous paragraph needs to be corrected.
I also restored text that Nirajsm deleted that explains the rationale for the criticism, made the result more grammatical, deleted elaboration on the Buffett criticism because it was a restatement, and pulled more quotations out of the Bloomberg reference.  Spike-from-NH (talk) 15:17, 29 August 2016 (UTC)
replies: text: "One Step Ahead: Private Equity and Hedge Funds After the Global Financial Crisis" (Timothy Spangler) on page 93 clarifies that ordinarily, the performance components of Hedge Funds is called a "performance fee" and for private equity funds the same component is described by the term "carried interest". On the same page it is clarified that only carried interest earned by private equity funds is subjected to capital gains tax treatment. The Marois/Alesci (Bloomberg) citation is not incorrect and in some exceptional circumstances hedge funds can earn "carried interest" if the nature of their investments is similar to private equity investments i.e. they are long term investments. But as the Spangler text explains in detail that this is not ordinarily the case. Even if this is the case then in that circumstance a fund will be straddling the boundaries of a "hedge fund" and a "private equity fund" and is some form of a composite. In light of this, the related article "Taxation of private equity and hedge funds" also needs the same correction. Nirajsm (talk) 14:40, 31 August 2016 (UTC)
replies: text: I have made a change in the previous paragraph, but added a citation that the tax "loophole" is associated with hedge funds, even if, in practice, they tend not to have gains to which the special tax treatment applies.  Spike-from-NH (talk) 15:07, 31 August 2016 (UTC)

text: PS to --Have now also included your complaint about the term, and your citation, in the text.  Spike-from-NH (talk) 13:43, 16 December 2016 (UTC)
thread_title:  Hedge funds 

message: Hello fellow Wikipedians,
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thread_title:  External links modified 

message: attached  to this article.  During my recent edit, I took pains to obtain citations from across the political spectrum.  The article now includes a citation in favor of the unanimously opposed "hedge-fund loophole."  The former section dismissing claims that tax reductions had effect is now more balanced and includes a section on difficulties in measuring and correlating the effects.  I have asked PJtP on his talk page what he considers unbalanced and have not gotten a response.  Am undoing this edit.  Spike-from-NH (talk) 13:46, 17 January 2017 (UTC)
thread_title:  Unbalanced 

message: Hello fellow Wikipedians,
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replies: text: The Kiplinger article on what was new, nine years ago, I deleted; there is still another, better citation in the same place.  Spike-from-NH (talk) 15:40, 30 July 2017 (UTC)
thread_title:  External links modified 

message: Hi! As a preface, I haven't contributed to Wikipedia before, so I hope you can excuse any procedural faux pas I might make. I'm trying to follow the guidelines as best I can.
The first sentence of the history section states: "From 1913 to 1921, capital gains were taxed at ordinary rates, initially up to a maximum rate of 77%." I came to the article looking specifically for information like this, and the number seemed unusually high so I checked out the source material. The article cited states: "From 1913 to 1921, capital gains were taxed at ordinary rates, initially up to a top rate of 7 percent." So I'm thinking the 77% might be a typo. On the other hand, if it was really 7% I don't understand the purpose of a 12,5% alternative rate that was later introduced. Perhaps it's a good idea to find another source. In any case, the 77% figure seems incorrect, but I'm not confident in my Wikipedia-skills to just go ahead and make an alteration without consulting. Any help is appreciated.  2001:980:7E8D:1:7D01:9274:F752:32F5 (talk) 22:39, 30 April 2019 (UTC)
replies: text: Hello and welcome!  Making contact on the talk page prior to making an edit is procedurally a good move.  The 77% is not a typo; in fact, it is apparently vandalism.  It was the most recent edit to the article (when viewing the article, click on History at the top of the page to see all the edits) and used to read 7%.  I did not immediately undo this edit, as I didn't know the facts, and 77% was a credible number from our (WW2) history, but I'll undo the edit right now.  Thank you!  Spike-from-NH (talk) 23:18, 30 April 2019 (UTC)
thread_title:  Discrepancy between source and article in the history section 

message: Brand new Wikipedian  makes large modifications to this article.  The essence is that the Tax Cuts and Jobs Act of 2017 tied capital gains rates to the brackets for ordinary income.  The Edit Summary is: Fixed issues with whomever was using the Motley Fool. Most of what was written was misinformation and was wrong. Updated tables to reflect changes. The sources are directly from the Tax Cuts and Jobs Act 2017 article.
I may have cited Motley Fool; I did read the actual Act; income levels resulting in the various tax brackets are hard-coded into the Act, and moreover, some are not exactly the income levels governing the rates on regular income.  Moreover, the Wikipedia article on the Act does not address capital gains tax at all.
I would like it if the Act had reduced capital-gains rates so elegantly, but my belief is that it did not.  Also, the edit does other baffling things, like deliberately put awkward vertical space at the top of the article; change the clear word "lower" to the jargon "preferential"; and remove the material in the table setting out the actual income levels that trigger the various rates.  Finally, the new table in Section 2.1 did not use the three-asterisk legend to repeat the note that some capital gains may also be subject to the new 3.8% surtax (that the article, elsewhere, now correctly names the net investment income tax.  Spike-from-NH (talk) 12:23, 9 November 2019 (UTC)
thread_title:  Motley Fool 

message: This new section is problematic.  I think the prior text suffices; see the second bullet in the list under Additional taxes.
The Yahoo! article states that the reason nine states don't tax capital gains is that they don't have a state income tax.  This is not the reason, as two of the states in the list do or did have a state income tax, but only on dividends and interest.  Tennessee has phased out its Hall income tax; while New Hampshire is set to do so starting in 2023.  I've applied this clarification to the article (partly in the footnote), but the result is way too much text not having to do with "Capital gains tax in the United States".
Separately, a New Hampshire state capital gains tax was a campaign issue in 2020 (though it bombed at the polls for the party that proposed it).  Such a tax would further refute the Yahoo! article, though of course any state that did tax capital gains would then have a state income tax; a state could conceivably tax capital gains and no other income.  Spike-from-NH (talk) 00:07, 16 January 2022 (UTC)
replies: text: Yeah I thought so, thanks.--Wikideas1 (talk) 05:03, 16 January 2022 (UTC)
thread_title:  State capital gains taxes 

message: Editor  helpfully revised the article's tax brackets to reflect the 2022 tax year.  I told him on his talk page that Americans, until the filing date in mid-April, are focused on preparing our taxes for 2021, and until that filing date, it will be most helpful to readers to state the brackets for 2021.  This is not the current tax year, but it is the current tax filing season.  I hope this edit will be reverted, then re-applied in April.  Spike-from-NH (talk) 04:41, 16 January 2022 (UTC)
thread_title:  Timing of revision of tax brackets 

message: The Capital gain tax on 41.673 Dollar is 0 Dollar
How much is the Capital gain tax on 41.677 Dollar?
All the Online Tax Calculators (Forbes.com, smartasset, nerdwallet) say its still nothing. Or is it suddenly 15% on the whole amount?
--Gofrege1 (talk) 14:30, 7 April 2022 (UTC)
replies: text: The article shows $41,675 as the zero-bracket amount for single taxpayers in 2022.  Long-term capital gains up to that amount are not taxed (but see the notes under that table).  If you had long-term gains of $41,677, then $2 (not the whole thing!) would be taxed at 15%.  That is 30 cents; most taxpayers use the whole-dollar method and would round this down to zero.  If you continue your experiment and type $41,775 into the tax calculator, you'll see how it works.  Spike-from-NH (talk) 22:00, 7 April 2022 (UTC)
thread_title:  Tax on 41.673 Dollar and 41.677 Dollar