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capital gains Archive

Monday

30

August 2010

0

COMMENTS

Economists Call for Tax Cut Extension

Written by , Posted in Economics & the Economy, Taxes

The Wall Street Journal blog Real Time Economics is reporting that a 60% majority of economists surveyed by the National Association for Business Economics say the current rates for capital gains and dividends should not be raised to expire at the end of the year as currently scheduled.  A further 22% think the rates should be extended for middle-income payers, but not the wealthy.

At least 60% of economists surveyed by the National Association for Business Economics said lower tax rates on capital gains and dividends should not be allowed to expire as provided under current law. Another 22% said the lower rate on capital gains and dividends should be preserved for middle-income taxpayers, but not for the wealthy.

The findings point to increasing nervousness about the impact the expiration of tax cuts could have on the struggling recovery, as Congress gears up for a fall debate on how to deal with the tax cuts.

…Opinion among economists was a little more evenly divided with regard to the expiration of individual income tax rates. Fifty-four percent of those surveyed by NABE favored extending the current rates, while 33% favor Obama’s plan to let rates rise on the wealthy.

In order to provide the most economic impact, tax rates on capital gains and dividends should remain low – or better yet, be eliminated – for all Americans.  As this recent Wall Street Journal correctly points out, “rich people are the most responsive to changes in tax rates.” Thus, it would be a mistake to succumb to class-warfare and narrowly target tax relief.

Monday

21

June 2010

0

COMMENTS

Russia Eliminating Capital Gains Tax

Written by , Posted in Taxes

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.