As has been answered on many questions, people pay 0% capital gains if their taxable income is below $40,000, 15% capital gains tax if between $40,000 and $441,450 and 20% if over $441,450. My question is, like regular income tax, are these taxes progressive?
For example, say I make a salary of $32,500 per year. I take the standard deduction of $12,500. So my taxable earned income is $20,000. Now let's say I sell some stocks I've been holding for 10 years, for a capital gain of $40,000. So is my capital gains tax 15% of $40,000 (since my combined taxable income, 60,000, is over 40,000) or do I pay 15% of $20,00 (I pay 0% on the first 20,000 of capital gains income until I hit $40,000 total income, then pay 15% on the remainder above $40,000)?
In other words, is capital gains tax progressive in the USA (just like regular income tax)? Assume I am talking only about federal tax. I shockingly can't find this info on the IRS website.