History of Capital Gains Tax in The U.S.
From 1913 to 1921, capital gains were taxed at ordinary rates, initially up to a maximum rate of 7 percent. In 1921 the Revenue Act of 1921 was introduced, allowing a tax rate of 12.5 percent gain for assets held at least two years. From 1934 to 1941, taxpayers could exclude percentages of gains that varied with the holding period: 20, 40, 60, and 70 percent of gains were excluded on assets held 1, 2, 5, and 10 years, respectively. Beginning in 1942, taxpayers could exclude 50 percent of capital gains on assets held at least six months or elect a 25 percent alternative tax rate if their ordinary tax rate exceeded 50 percent. Capital gains tax rates were significantly increased in the 1969 and 1976 Tax Reform Acts. In 1978, Congress reduced capital gains tax rates by eliminating the minimum tax on excluded gains and increasing the exclusion to 60 percent, thereby reducing the maximum rate to 28 percent. The 1981 tax rate reductions further reduced capital gains rates to a maximum of 20 percent.
The Tax Reform Act of 1986 repealed the exclusion of long-term gains, raising the maximum rate to 28 percent (33 percent for taxpayers subject to phaseouts). When the top ordinary tax rates were increased by the 1990 and 1993 budget acts, an alternative tax rate of 28 percent was provided. Effective tax rates exceeded 28 percent for many high-income taxpayers, however, because of interactions with other tax provisions. The new lower rates for 18-month and five-year assets were adopted in 1997 with the Taxpayer Relief Act of 1997. In 2001, President George W. Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001, into law as part of a $1.35 trillion tax cut program.
According to USA Today (“New rule puts a wrinkle in figuring taxes on stock sales” by Mark Krantz published February 13, 2012 page 6B) the Emergency Economic Stabilization Act of 2008 caused the IRS to introduce form 8949 – Sales and Other Dispositions of Capital Assets and introduced radical changes to form 1099-B.
Read more about this topic: Capital Gains Tax In The United States
Famous quotes containing the words history of, history, capital, gains and/or tax:
“I believe that in the history of art and of thought there has always been at every living moment of culture a “will to renewal.” This is not the prerogative of the last decade only. All history is nothing but a succession of “crises”Mof rupture, repudiation and resistance.... When there is no “crisis,” there is stagnation, petrification and death. All thought, all art is aggressive.”
—Eugène Ionesco (b. 1912)
“The history of the world is none other than the progress of the consciousness of freedom.”
—Georg Wilhelm Friedrich Hegel (1770–1831)
“As our boys and men are all expecting to be Presidents, so our girls and women must all hold themselves in readiness to preside in the White House; and in no city in the world can honest industry be more at a discount than in this capital of the government of the people.”
—Jane Grey Swisshelm (1815–1884)
“... we have every reason to rejoice when there are so many gains and when favorable conditions abound on every hand. The end is not yet in sight, but it can not be far away. The road before us is shorter than the road behind.”
—Lucy Stone (1818–1893)
“In 1845 he built himself a small framed house on the shores of Walden Pond, and lived there two years alone, a life of labor and study. This action was quite native and fit for him. No one who knew him would tax him with affectation. He was more unlike his neighbors in his thought than in his action. As soon as he had exhausted himself that advantages of his solitude, he abandoned it.”
—Ralph Waldo Emerson (1803–1882)