CAN MILLIONAIRES AVOID A SURTAX ON THEIR LONG-TERM CAPITAL GAINS? INTRODUCTION

To determine the potential to avoid the surtax, we calculate the number of tax returns with at least $1 million of taxable income, with and without long-term capital gains. [...] The 31,000 taxpayers that consistently exceed $1 million in taxable income without long-term capital gains cannot change the timing of their gains to avoid a tax increase on the gains of millionaires. [...] We explore this potential in Table 2 by calculating the number of taxpayers with more than $1 million of taxable income including and excluding long-term capital gains, and the amount of gains that could be subject to a tax on millionaire gains, for the years 1999 through 2021. [...] Much of the research on the response of capital gains to taxation focuses on gains from the sale of personally held capital assets, such as stocks and bonds. [...] First, we calculated the total amount of gains in taxable income, the amount of income greater than $1 million, and the amount of long-term capital gains that would be subject to a tax increase on those with more than $1 million in income.