Commentary The Answer Isn't Capital Gains
Leonard E. Burman
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Even before the ruins of the World Trade Towers stop smoldering, Congressional leaders are quietly planning to revive their favorite scheme to boost the economy—a $20 billion plus cut in capital gains taxes, possibly as an add-on to minimum wage legislation. Proponents, led by Senate Minority Leader Trent Lott, claim that a temporary cut in the already low tax rate on profits would both raise revenues and stimulate spending and investment. That's nonsense. While a capital gains tax cut would surely boost the bank accounts of the wealthy, it would not revive our flagging economy and might further destabilize the skittering stock market.
Research Areas Taxes and budgets
Tags Federal budget and economy
Policy Centers Urban-Brookings Tax Policy Center