Figure 2

Effective tax rates on S&P 500 can far exceed the statutory rate

Capital gains taxes on inflationary gains can push the effective tax rate well above the 23.8% statutory rate.

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Notes: Missing value when nominal returns are zero. Effective tax rate of 178% in 1961. Infinite tax rates in years 1963, 1966, 1969-1973, and 2001. Panel scales are different to show greater detail.

Sources: Author's calculations, Yahoo Finance, BLS, and Tax Foundation.