Capital gains tax

Warren Buffet has said that his secretary pays a higher tax rate than he does which is true but this is often reported as she paying more tax that he does. This difference is because she pays income tax on wages and he does not receive a wage but lives on dividends which are taxed at a lower rate. A single person earning one million dollars in MN would pay 37% in federal tax and 9.85 state income tax. In addition, they would pay $10,000 in social security tax and $23,500 in Medicare tax. They would also pay a 3.8% surtax on The net pay on one million would be $466,000. The same person living on dividends of one million would pay 20% capital gains plus a 3.8% surtax and net $762,000. This compared to the $466,000 paid by the capital gains. A tidy $300,000 savings. This is why many feel that the capital gains tax should be eliminated. The three members of the Walmart family own 3 billion shares and the annual dividend is one dollar per share so they receive one billion dollars each and each pays $230 million in tax as capital gains. If they had to pay ordinary income tax, they would pay $520 million so this tax break saves each family member $290 million dollars per year. The family donates $1.7 billion per year to charity. This reduces their tax due by $130 million. This leave each with $300 million