Tag: capital gains
-
Technical Note on the Economics of Taxing Capital Gains
This technical note describes how, under the current system of capital gains taxation, capital gain income is taxed at lower rates than labor income—and only upon realization of the gains and with a step-up in basis at death. This system distorts the economy and contributes to inequality. Lower tax rates on capital gains income do…
-
Assessing the Effects of a Dividend and Capital Gains Tax Increase
This brief provides a new analysis of the macroeconomic effects of raising taxes on dividend income and capital gains. Increasing dividend income and capital gains taxes from 20% to 39.6% for households earning over $1 million would raise government revenue by about 5% and GDP by about 1% in the long term. The proposed tax increase…