This isn’t about billionaires. A poor retiree in CA with Apple stock is losing close to 60% of their dividends to taxes:
The reason capital gains rates are lower than individual income rates is partial compensation for the effects of inflation. If inflation is 2% per year and your investment increases 20% over 10 years, you lost money but still owe taxes. During high inflationary periods this effect kills the stock market, because taxes make investing becomes a guaranteed loser.
The reason dividend rates are so low is that the money has already been taxed multiple times in its way to the shareholder. Foreign, State and Federal Corporate income taxes. Your 20% dividend rate is just the tail end of about 60% in total taxes, including state income taxes too.
"A poor retiree in CA" doesn't own AAPL. Not directly, not through a 401(k) or other vehicle. They're living off Social Security payments.
And retirement investment vehicles, smartly managed, start moving out of stocks and into less volatile securities as you reach actual retirement. So if that retiree is still in AAPL post-retirement, there are other issues going on.
The reason capital gains rates are lower than individual income rates is partial compensation for the effects of inflation. If inflation is 2% per year and your investment increases 20% over 10 years, you lost money but still owe taxes. During high inflationary periods this effect kills the stock market, because taxes make investing becomes a guaranteed loser.
The reason dividend rates are so low is that the money has already been taxed multiple times in its way to the shareholder. Foreign, State and Federal Corporate income taxes. Your 20% dividend rate is just the tail end of about 60% in total taxes, including state income taxes too.