Embracing the inner wonk

By Libby

Having joined the working class poor three years ago for reasons that will remain unexplained, the capital gains tax doesn't mean a whole lot to me, but it is going to become an issue because the media is going to flog the GOP's "Democrats only want to raise your taxes" meme endlessly. Atrios has the appropriate comeback.

With talk of raising the capital gains tax in the air, you're going to hear a lot of conservatives and mainstream media folks blather on about how much this kind of thing is going to be so bad for the "middle class" or "even working folk" because everyone is invested in the stock market through 401K plans, etc. But the capital gains tax rate will never apply to that money. More than that, any capital gains from those plans will be, upon withdrawal, taxed at the income tax rate which for most people will be higher than the current 15% capital gains rate. So wealthier people who have direct investments in stocks and whatnot get to pay 15% on their capital gains, while the rest of us in lowly 401K land will likely be paying a higher rate.

I'd suggest you file that away for future reference. I have a feeling you'll need it -- often -- before this is all over. Meanwhile, see my Newshoggers post on how the lending industry will get away with screwing us over.