Capital gains tax. Income tax. Why are they difference? Why do they exist? Are you overwhelmed by the tax system? You’re not alone! In the United States of America we have a tax system so complicated that there are literally careers made from it. If you are a beginner to the tax system it can get very confusing very quickly. One of the best pieces of advice I can give you is to find yourself a quality certified public accountant (CPA) to handle all of your tax needs; however, it is also wise to at least understand some general dynamics of how taxes work. Understanding how taxes work ensures you become an informed citizen, which I would argue makes you a good citizen. Sure, we don’t need to agree on every aspect of taxes, wealth building, politics, etc.; however, I firmly believe that even if two people disagree, if both people know the other one has at least put in some effort to understand the issues, a mutual respect can be formed. There is a very popular mainstream media talking point that is constantly being tosses into the mix about the rich paying less than their workers in taxes. In this actually true? No. You’ll see why it’s a clever lie after you understand the way capital gains tax and income tax are set up. Let’s get to it!