Final answer:
The tax rate that does not apply to long-term capital gains is 39.6%, as the highest individual income tax rate after the Tax Cuts and Jobs Act of 2017 is now 37%. Long-term capital gains are taxed preferably at rates of 0%, 15%, and 20%.
Step-by-step explanation:
The tax rate that does NOT currently apply to long-term capital gains is 39.6%. After the Tax Cuts and Jobs Act of 2017, the highest individual income tax rate was reduced from the previous 39.6% rate to 37%. It's important to note that long-term capital gains are taxed at different rates than ordinary income, often at preferential rates due to policy measures aimed at encouraging investment. The current long-term capital gains tax rates are 0%, 15%, and 20%, depending on the filer’s taxable income.
Tax brackets for ordinary income were indeed historically as high as 39.6% or even higher, and the tax structure is generally progressive, meaning that as income rises, so does the tax rate. However, this rate no longer applies to long-term capital gains after recent tax legislation. Thus, the correct answer to the question is option 4: 39.6%.