Archive for the ‘Capital Gains’ Category

Chairman Camp Agrees: Too Many Choices Burden our Tax System

Last week’s draft plan by House Ways & Means Committee Chair Dave Camp (R-MI) to reform the taxation of financial products includes two key changes that would simplify rules, reduce manipulation, minimize compliance burdens, and improve tax administration. The first would require investors to use the “mark-to-market” method of accounting for all derivatives, other than […]

Understanding TPC’s Analysis of Governor Romney’s Tax Plan

The Tax Policy Center’s latest research report went viral last week, drawing attention in the presidential campaign and sparking a constructive discussion of the practical challenges of tax reform. Unfortunately, the response has also included some unwarranted inferences from one side and unwarranted vitriol from the other, distracting from the fundamental message of the study: […]

Five Challenges for the IRS’s New Capital Gains Reporting Rules

Sellers of stocks and other assets have always had to calculate their cost basis (generally, what they paid for the investment) in order to figure their taxable capital gains. In the past, this was often a hit-or-miss experience that required lots of tedious research (occasionally with help from brokers) and more than a bit of […]

No Obvious Relationship between Capital Gains Tax Rates and Economic Growth

If you read the editorial page of financial newspapers, you might conclude that no aspect of tax policy is more important for economic growth than the way we tax capital gains.  You’d be wrong. The chart displayed above shows top tax rates on long-term capital gains and economic growth (measured as the percentage change in […]

Romney’s Tax Plan Really Does Favor the Rich

Despite evidence to the contrary, there is a lingering view that Mitt Romney’s tax plan would primarily help middle-income households and not favor the rich. Yet TPC’s analysis of the plan clearly showed that high-income households would win big and others would do less well. Poor families would actually lose, relative to the taxes they’re […]

Why Do U.S. Investment Funds Operate in Tax Havens?

Mitt Romney’s holdings in the Cayman Islands have generated lots of interest in investment funds that are managed from the U.S. but incorporated in foreign jurisdictions.   But taxable U.S. investors like Romney don’t get much benefit from such funds.  The real winners are U.S. tax-exempt entities, such as charities, pension funds, university endowments, and IRAs, […]

Tax Policy in Margaritaville: The Buffett Rule

I’m trying a new thing in the blog–imagining a debate between a smart conservative and liberal economist on a contentious tax policy issue. Here liberal economist Keynes and conservative economist Hayek debate the Buffett Rule–President Obama’s proposal that millionaires pay tax rates at least as high as middle-income people.  Let me know whether you think […]

The Democrat’s Millionaire Tax: Smart Politics, Awful Policy

Senate Democratic Leader Harry Reid’s plan to fund a $445 billion stimulus, err, jobs bill with a 5.6 percent surtax on millionaires is not all bad. After all, Tax the Rich does make a nice campaign bumper-sticker. But it is mostly bad. Why? Here are five reasons. The idea, endorsed today by President Obama, would […]

Obama’s Buffett Rule: Keep Your Eye on Capital Gains

President Obama didn’t quite get around to saying so when he rolled out his latest deficit reduction plan on Monday, but his Buffett Rule—that no one making more than $1 million should pay a lower tax rate than those in the middle-class—is mostly about investment income. On average, high income people do pay significantly higher tax rates than […]

Debating the Buffett Rule

On Monday, the Administration released its deficit reduction blueprint.   One part of the Administration’s proposal, which has received enormous attention, is that the Joint Select Committee on Deficit Reduction should observe the “Buffett Rule” if it attempts tax reform.  The furor over this proposal is surprising and the debate about it seems to have largely […]