Russia Eliminating Capital Gains Tax

Formerly communist Russia is beating supposedly capitalist America at our own game. In order to attract new investments, Russia will eliminate their capital gains tax in 2011.

Russia will scrap capital gains tax on long-term direct investment from 2011, President Dmitry Medvedev has said.

Mr Medvedev said that in terms of improving Russia’s investment climate “we, I hope, are moving forward”.

…Its oil revenues fund, which has been financing the deficit, is expected to end next year, and the government wants to attract more foreign investment to boost the economy.

In recognizing that the correct capital gains rate is zero, Russian politicians seem to understand tax policy better than our own. Meanwhile, the U.S. capital gains rate will increase from 15 to 20 percent in 2011 if Congress does not extend the cuts enacted under Bush. The recently passed government run healthcare bill also included a 3.8% rate increase that will take effect in 2013.

Maybe the Russians will just be capturing the investments that Americans don’t want.

capital gains Russia