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When you chose to invest in a non-retirement account you pay your income tax and capital gains tax. That is being taxed twice.

I don't see how. The capital gains tax is not paid on your cost basis (the invested amount on which you paid ordinary income tax). It is only assessed against the gains on that investment.

If I invested $1000 of my earnings (for which I paid $280 in Federal income tax) in a stock , and that investment grew to $3000 by the time I sold it over a year later, I would then pay 20% LTCG on the $2000 gain ($400). I now have $3000 cash in hand for which I paid a total of $680 in taxes. No double taxation here.

Where do you ever pay both ordinary income tax and capital gains tax on the same dollar?

Shy
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