Answer:
The federal government uses the capital gains tax for general federal purposes. It is not designated for any specific purpose. Revenues from the tax can be used for anything from soldiers' salaries to interest on the national debt and millions of other expenditures.

State and local income taxes are used according to state and local law.
First answer by Notchrishanson. Last edit by Dracular. Contributor trust: 115 [recommend contributor recommended]. Question popularity: 2 [recommend question].