I've been studying the prospectus for a Vanguard Index fund that I'm invested in, and I'm confused as to what percentage and what taxes I will end up paying. When the prospectus's tax information says that it will be taxable as ordinary income or capital gain, does that mean that I'll get hit with my top tax bracket rate as well as the capital gains tax (15%) when I realize any gains?

Additional related questions-

1. What taxes will I be paying if I sell before 18 months (this number comes from a previous question that I asked and was told to hold the investment for at least 18 months to reduce the taxes)?
2. How can I find if there is any local state tax on my investment when I sell? Would the regular sales tax apply here? I'm located in Texas.

Here is the Tax Information from the Prospectus

The Fund’s distributions may be taxable as ordinary income or capital gain. Distributions 
are taxable to you for federal income tax purposes, whether or not you reinvest these 
amounts in additional Fund shares. A sale or exchange of Fund shares is a taxable event, 
which means that you may have a capital gain to report as income, or a capital loss to 
report as a deduction, when you complete your federal income tax return. Dividend and 
capital gains distributions that you receive, as well as your gains or losses from any sale 
or exchange of Fund shares, may also be subject to state and local income taxes.

Thanks for your time.

I've been studying the prospectus for a Vanguard Index fund that I'm invested in, and I'm confused as to what percentage and what taxes I will end up paying. When the prospectus's tax information says that it will be taxable as ordinary income or capital gain, does that mean that I'll get hit with my top tax bracket rate as well as the capital gains tax (15%) when I realize any gains?

Additional related questions-

1. What taxes will I be paying if I sell before 18 months (this number comes from a previous question that I asked and was told to hold the investment for at least 18 months to reduce the taxes)?
2. How can I find if there is any local state tax on my investment when I sell? Would the regular sales tax apply here? I'm located in Texas.

Here is the Tax Information from the Prospectus

The Fund’s distributions may be taxable as ordinary income or capital gain. Distributions are taxable to you for federal income tax purposes, whether or not you reinvest these amounts in additional Fund shares. A sale or exchange of Fund shares is a taxable event, which means that you may have a capital gain to report as income, or a capital loss to report as a deduction, when you complete your federal income tax return. Dividend and capital gains distributions that you receive, as well as your gains or losses from any sale or exchange of Fund shares, may also be subject to state and local income taxes.