Michael Smith, Certified Financial Planner
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If, over the long term, the stock increases in value - you would pay capital gains taxes upon sale which are often much lower (15% rate usually) than your income tax rate. And, you can time when you will incur that tax hit by not selling. So, if you buy a stock for $20, sell it for $60 - you have tripled your money & won't pay taxes until sale.
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