What tax loopholes to cut? EconoMeter panel knows
Roger Showley, U-T SAN DIEGO
Friday, November 16, 2012
Kelly Cunningham, National University System
Lowering capital gains tax rates boosts economic growth and increases tax revenues. Capital formation is key to long-range growth and rising living standards. Keeping taxes low on investment stimulates the economy, raises wages, and creates jobs. Under current tax rules, gains from investments are fully taxed, but losses are not fully deductible. This is a disincentive to taking risks. Lower tax rates help compensate for not being able to write-off capital losses. Lower tax rates on capital investment also encourages saving and investment. While the U.S. taxes business profits when earned, taxing the sale of stock or business is double taxation.