The 2003 tax cuts reduced the tax rate on long-term capital gains from 20 percent to 15 percent, but this rate will return to the higher level on January 1, 2011. Proponents argue that the higher tax rate will bring additional money into the government coffers and make the tax system fairer. There are very strong arguments, though, that a capital gains tax discourages entrepreneurial activity and investment. Moreover, if the tax has a sufficiently large impact on the incentive to invest and the incentive to sell appreciated assets, then it is quite possible that assumptions of higher tax revenue are misguided. Another key issue is the degree to which a capital gains tax impacts capital mobility in a world where many countries do not tax capital gains. As policymakers consider capital gains and related tax issues, it is important that they understand how taxation impacts economic progress.
Featuring the author Angus Deaton, Dwight D. Eisenhower Professor of Economic and International Affairs, Woodrow Wilson School of Public and International Affairs & Economics Department, Princeton University; with comments by Charles Kenny, Senior Fellow, Center for Global Development; moderated by Ian Vasquez, Director, Center for Global Liberty and Prosperity, Cato Institute.
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December 10, 2013
December 9, 2013
The 2008-2009 financial crisis and Great Recession have vastly increased the power and scope of the Federal Reserve, and radically changed the financial landscape. This new ebook examines those changes and considers how the links between money, markets, and government may evolve in the future.