Don't feel bad, Midpack. In fact, thanks very much for posting. (And great chart, LOL!)
For 5 years+ I have been reading innumerable posts with "I'm planning to harvest my capital gains" and until this thread I didn't fully understand the meaning.
Disclosures: Solidly in the middle of the accumulation phase. I'm several years away from RE and withdrawals. I haven't filed a schedule D or had dividend-paying investments in my after-tax accounts for number of years, i.e. I buy and hold almost 100% non-dividend-paying stocks in those accounts to minimize current taxes.
Even if I had filed Sch. D, our taxable income exceeds the 15% bracket - I probably would not have any reason to make Midpack's discovery even if I did have current taxable dividends and capital gains to report.
Also, all along I have been assuming that the "base" 15% dividend and capital gains rate I see in the news is applied to the first dollar and the last dollar of that year's div / CG income.
Thus I was reading the CG-harvesting posters' strategy as targeting the combined total of taxable income, dividends and LTCG's to avoid their next $1 of income being taxed at 25%. It made perfect sense in that context, as a way to manage taxes on discretionary withdrawals made from taxable accounts. Why make a withdrawal of $10 with $6 effectively taxed at 15% and $4 taxed at 25% when only $6 of cash is needed for living expenses?
It's now clear to me that I wasn't paying close attention. To learn that "capital gains harvesting" has been a much sweeter deal is revelation.
And to hear that it's now set to continue going forward with the fiscal cliff deal is even better news.
Time to rethink some of my biases against taxable accounts...