For tax purposes, other income also falls under the capital gains rate, including carried interest, which is when an individual is paid a portion of the profits generated by a fund or partnership.
In Romney’s case, $12.6 million of his 2010 income was classified as capital gains, according to his tax filings. Had that money been paid as salary or wages, most of it would have been taxed at 35 percent; instead, it was assessed at less than half that rate.
The rationale behind the lower capital gains rate, Newpol said, is that “we want to encourage people to invest in stocks, bonds and things like that because that’s good for the economy, it creates jobs.”
