All the nonsense about high marginal tax rates and high capital gains taxes
discouraging investment in the US...total distorted (pardon the pun)
bullsh*t.
I once compiled a (what I like to think of as handy) list of historical
personal income tax rates in the US:
http://www.truthandpolitics.org/top-rates.php#table
Those rates really look pretty high, don't they?
At the same time, however, due to my reading, I was well aware that you
have
to be aware of the tax base in these matters---that is, what goes into
adjusted gross income is vitally im****tant to really understand the
numbers.
At a local university library, I read something about capital gains being
historically treated differently---that is, a hefty fraction just
completely
excluded from income. Unfortunately, I didn't have time to read up
further
on that.
Had to go back to work in order to pay landowners money for doing
nothing---which is funny because another aspect of the capital gains tax
issue is that much of capital gains are actually "land" (real estate)
gains.
In looking at _that_ question (what fraction of cap gains in the US are
actually due to real estate (viz, land) appreciation?), I found this via
google:
http://www.urban.org:80/publications/1000519.html
In particular:
"History of capital gains taxation in the United States
"From 1913 to 1921, capital gains were taxed at ordinary rates, initially
up
to a top rate of 7 percent. Because of concern that the higher income tax
rates introduced during World War I reduced capital gains tax revenues,
from
1922 to 1934 taxpayers were allowed an alternative tax rate of 12.5
percent
on capital gains on assets held at least two years. From 1934 to 1941,
taxpayers could exclude percentages of gains that varied with the holding
period. For example, in 1934 and 1935, 20, 40, 60, and 70 percent of gains
were excluded on assets held 1, 2, 5, and 10 years, respectively.
Beginning
in 1942, taxpayers could exclude 50 percent of capital gains on assets
held
at least six months or elect a 25 percent alternative tax rate if their
ordinary tax rate exceeded 50 percent. Capital gains tax rates were
increased significantly in the 1969 and 1976 Tax Reform Acts. The 1969 act
imposed a 10 percent minimum tax, excluded gains, and limited the
alternative tax to $50,000 of gains. The 1976 act further increased
capital
gains tax rates by increasing the minimum tax rate to 15 percent. In 1977
and 1978, the maximum tax rate on capital gains reached 39.875 percent
with
the minimum tax and 49.875 percent including an interaction with the
maximum
tax. In 1978, Congress reduced capital gains tax rates by eliminating the
minimum tax on excluded gains and increasing the exclusion to 60 percent,
thereby reducing the maximum rate to 28 percent. The 1981 tax rate
reductions further reduced capital gains rates to a maximum of 20
percent."
Wow---those ostensibly high marginal rates aren't as high after all, at
least for capital gains!
Weird that no one ever talks about this. Not.
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