Modify base for top capital gains tax rate (CG_rt4) #2500
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Coverage 99.92% 99.92%
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Files 13 13
Lines 2591 2591
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Hits 2589 2589
Misses 2 2 Continue to review full report at Codecov.
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Thanks @Peter-Metz. Glad to see the new test, too. I also confirmed that the top rate under current law kicks in at ~$435 (single) as expected.
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Currently, the capital gains function inadvertently stacks the second (
CG_brk2) and third (CG_brk3) brackets before applying the top capital gains rate (CG_rt4), instead of applying the top rate to income aboveCG_brk3. In current law,CG_brk3is set to9e99andCG_rt4is set to1.0so this change has no bearing on current law.The current behavior can be visualized with a Tax-Cruncher skyline chart of MTR's wrt long-term capital gains. In the chart below, the top bracket is set to $1,000,000 but the top rate doesn't kick in until ~$1,450,000:
I've also added a test that checks MTR's on the edges of the top bracket.