Policy Watch: Cutting Capital Gains Taxes
AbstractFrom 1922 to 1986, long-term capital gains were taxed at lower rates than other income, generally by allowing a portion of long-term capital gains to be excluded from taxable income. While taxing capital gains at the same rates as other income has been hailed by some as a major accomplishment of tax reform, it has been criticized by others as one of its main flaws. As a result, there have been proposals each year since 1986 to restore some type of capital gains preference. These proposals have sparked a lively debate centered on three main questions: Would reducing the capital gains tax lower or raise federal revenues? Who benefits most from cutting the capital gains tax? Would lower tax rates on capital gains improve economic performance?
CitationAuten, Gerald E., and Joseph J. Cordes. 1991. "Policy Watch: Cutting Capital Gains Taxes." Journal of Economic Perspectives, 5 (1): 181-192. DOI: 10.1257/jep.5.1.181
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes