If Republicans in Congress have their way, tax rates will be negative for a large portion of investment income. What does that even mean?

Let’s start with current law. If you are fortunate enough to have purchased a stock for $1,000 and sell it for $10,000, under current law you would pay tax on the $9,000 capital gain — in other words, on the $9,000 your investment earned. Assuming you are an individual with income between $48,351 and $533,400, the federal tax rate on your $9,000 of investment income would be 15 percent, for a total tax bill of $1,350. The bottom line is that you would have sold the stock you bought for $1,000 at a price of $10,000, paid $1,350 in taxes, and pocketed the remaining $7,650.

If, however, Congress passes the Educational Choice for Children Act, instead of selling your stock and pocketing $7,650, you could simply donate your stock in accordance with the legislation and pocket the full $10,000.

To be eligible, all you would have to do is give your stock to a “Scholarship Granting Organization” that funds vouchers........

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