Capital Gains Tax Laws: wrong for America

by Peter Rothchild

Are you at all unsure about the whole Capital Gains Tax laws issue? There's no need to be. Although capital gains and capital gains tax are very important concepts for American investors, the capital gains tax laws and rules aren't as perplexing as one might think. Neither is the controversy. By the end of this "Capital Gains Tax Laws: wrong for America" article you will understand how the capital gains tax and capital gains tax laws work and why capital gains tax laws are hurting America.

What is capital gains tax?

Capital Gains Tax is simply a federal tax penalty that rears it's ugly head whenever anyone accumulates a profit, albeit from investment or simple productivity.
 
Some of the forms of income that is subject to capital gains tax includes:

• the sale of an investment,
• the sale of a home,
• the sale of a family business,
• the sale of a farm,
• the sale of a ranch, or even
• the sale of a work of art.

The good news is that capital gains tax laws only apply to the difference between the price paid for an item and the money received from selling it, which is called the capital gain. Most people refer to this as the "profit" rather than the legal term, capital gains.

The most common form of capital gain that people notice is the sale of stock. The capital gains tax rate for individuals is currently at one of its highest rates ever, 28%. Meanwhile, the capital gains tax corporate rate is much worse, and is fully at it's highest level in history, 35%.

That's 28% or 35% of the profit from the sale of stock, not the amount you got for it.

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