Posted on 06/09/2008 9:59:17 PM PDT by newbie2008
On December 31, 2010, the low tax rates on capital gains and dividends enacted in 2003 will increase to the higher level that applied prior to that year. Many economists agree that the expiration of these tax cuts will discourage investment and slow economic growth. The United States already has one of the world’s highest capital gains tax rates.
This paper examines the economic effects of allowing the tax rates on long-term capital gains and dividend income to increase in 2011. Because the economy would suffer from these tax increases, Congress should act now to make permanent the existing tax rates for capital gains and dividends.
Our analysis indicates that higher tax rates on these forms of income would do serious economic harm.[1] For example:
* The slower economy causes employment to shrink by 270,000 job in 2011 and 413,000 in 2018. Similar job losses continue for the next seven years of our model’s forecast horizon of 2008 through 2018. * Economic output as measured by gross domestic product (GDP) after inflation would fall by $44 billion in 2011 and $50 billion in 2012 from the levels that the economy would attain without this policy change. * These economic effects would be vividly evident in take-home pay. Personal income after taxes would decline by $113 billion after inflation in 2011 and $133 billion after inflation in 2012 when compared, again, to levels that would likely prevail without tax rates going back up.
Great. Thanks for reminding me.
Great article. I sent to everyone in my address book.
i will be paying every few years when I move an asset what a decent home costs.
some of us mid level well off folks get slammed
George Soros doesn’t feel it
Perhaps people will sell before the taxes go up to minimize their taxes.
Those cuts, not originally proposed by Bush but hammered out in a last minute senate deal, have been rocket fuel for the economy. Their expiration will only hasten what looks to be a slide into the malaise of the the coming Carter, oops, I mean Obama, years.
“Perhaps people will sell before the taxes go up to minimize their taxes.”
Better hope not. A rush to sell will drive the stock market, pensions, etc. into the toilet.
This is all so unnecessary. All the income taxes combined only bring in $1.3T. If people were willing to give up their deductions, exemptions, and tax credits, a Flat 10% tax on income (including individuals, corporate, estate, gift, and capital gains — but excluding SS income and tax exempt municipal bonds) would completely replace all that revenue. The only purpose in having a graduated tax system is to buy votes of people who would rather hold onto 10% of their income than take responsibility for their share of the cost of government.
About now the stock market ought to begin discounting the value of stocks for the built in tax on gains. We should see a drop of at least 10% because the after tax value will be less in 2010.
The deductions are necessary because otherwise people do not have the available cash on which to levy a tax.
I’m reading Robert Reich’s new book, “SuperCapitalism” right now and it’s shockingly bad. To see where Obambi and his merry bunch of stalinists are going to take this country read it.
Economic theory designed to destroy the system. Reich has corporations losing their entity status thereby allowing shareholders to be sued. The shareholder would hold the liability.
This is just one among many, many ideas designed to destroy the economy and replace it with a disaster.
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