Quote:
Originally Posted by arock10
So I spend money to make money and I am taxed at normal rates, but he is just taxed on capital gains rates because its "investments"? Which he actually wants to reduce the rate to 0%. Also the vast majority of people do not make most of their money ways that would be taxed by capital gains. The guy slaving away actually working gets taxed at a higher rate.
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When he has income from working, he (and you) pays the higher income tax rate on that money. When he invests it (and has already paid taxes on that money that he has earned and is now investing) the taxes (on that profit) are at a lower tax rate, just like your savings account, mutual fund and (when you withdraw the money) your 401K.