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Overall, however, it’s a relative pittance in postwar terms: The top tax rate on ordinary income was 90% or higher from 1944 through 1963, 70% from 1965 through 1981, and 50% from 1981 through 1986.

It’s true that the capital gains tax has typically been lower than the tax on ordinary income, reaching as high as 40% only briefly in the 1970s.

Tax capital gains at less than ordinary income.

Money distributed through a 401K account will be taxed as ordinary income.

A 58-year old person pulling $50,000 from his 401K will owe tax on this as ordinary income.