Capital Gains Tax Rate Annual Income Salary Bracket System

Every country around the world has the custom of charging income tax to every working citizen of the country. As the name implies, the tax is levied on the amount that one earns as his annual income. The country of the United States also has such provision. The amount that they have to pay as Capital Gains Tax rate depends upon the salary bracket that one falls into. In fact, the system of charging capital gain tax is initially divided into two parts: The Short Term Capital Gains and the Long-term capital gains. Both of them have shown a bit of a fluctuation in their rates over the few years.

Before the year 2003, the Capital Gain Tax Rate was quite high in all the tax brackets, much to the disliking of the people of the United States. However, after 2003, the rate was reduced considerably in both the long term and the short term capital gains. The people who fall under the category of lowest income tax bracket are charged at a rate of 15% and 5% on their annual income under the long term and the short term capital gains respectively. The date of expiry of this policy is in the year 2011.

However, this is only the range in which the Capital Gain Tax Rate move about. It has been fluctuating every year within this range. Each year new and new sub policies come in and go out of application upon this scheme. And these sub policies have been formulated beforehand. In the years 2008, 2009 and 2010 the rate is scheduled to become 0% in case of those who belong to the long term capital gains section and falls under the 10% and 15% income tax bracket. Similarly there have been policies scheduled after the year 2010.

After 2010, laws have been imposed on charging dividend on the payers ordinary income tax rate irrespective of which tax bracket his annual salary falls. Secondly, there will also be an increase up to 20% for those falling under long term capital gains scheme. This includes 10% for taxpayers in the 15% tax bracket. Thus the Capital Gain Tax rate for each and every citizen in the country of the United States will increase. Moreover, the qualified 18% capital gain rate will again be reinstated which includes 8% for taxpayers in the 15% tax bracket.

However, this system of fluctuating Capital Gain Tax rate is not taken in a good manner by all the people of the United States. Some are of the opinion that it is not justified to impose a lower tax on earnings from capital gains than from interest or dividends or from any other kind of income. Secondly, these kinds of taxes are generated mainly from investments made with after-income tax dollars and not from the one that are earned at present. However, there are some of those who feel that changing tax on income is totally immoral. Capital gains tax