The maximum tax rate on capital gains has historically been lower than the maximum rate on ordinary income

Maximum Tax Rate (%)

Sources: Internal Revenues Service and Tax FoundationEmbed Download image
Note: The maximum capital gains rate is the effective rate applying to high-income tax payers, including provisions that alter effective rates for significant amounts of gains. Those provisions include exclusions, alternative tax rates, minimum tax, alternative minimum tax, income tax surcharge, phase outs of itemized deductions, and the 3.8% net investment income tax.