I understand the theory about the rates. LTCG may be added to total income for the regular tax bracket, but is supposed to be taxed at a lower tax rate. Where is that? I see form 1040 simply adding the LTCG from Schedule D to the "taxable income," isn't this income used to look up the tax from the tables? Wouldn't that include LTCG with them? Where are LTCG "removed" from total income for regular tax?
