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Originally Posted by scaeagles
I am curious, though. Capital gains rates are a flat rate, are they not? And I thought they were 28%. How is it, then, based on your OP, that your effective rate is 40%? Tax law changes all the time, but I thought stock options were typically offered because of their tax advantage - it is not deemed as work related income, and liquidation would then only require capital gains taxes, with no medicare or social security taken out.
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According the ETrade page, they will indeed be witholding federal, state tax, SDI, medicare, and SS. Those are 25%, 9.3%, 1.08%, 1.45%, and 6.2% respetively. Don't ask me why it falls under all that instead of just CG.
Perhaps you're thinking of an employee stock purchase plan vs. a stock option. My company offers both, this is a stock option.