Cato’s Dan Mitchell gives a quick primer on the capital gains tax in the latest short video from the Center for Freedom and Prosperity.
President Obama wants to raise the rate from 15 percent to 20 percent. Dan gives six reasons why he should lower it to zero:
-Taxing saving and investment more means there will be less of it.
-Entrepreneurs will take fewer risks since higher capital gains taxes lower their return on investment. Why bother to innovate?
-America’s high capital gains tax rate makes us less competitive than other countries that have a lower tax rate – or no tax at all.
-IRS busybodies nosing around in our investment portfolios is hardly conducive to protecting privacy.
-Investment creates jobs. The capital gains tax lowers investment, and therefore job creation.
-A capital gains tax is inherently unfair. Tax laws should not penalize people based on how they earn, spend, or save their income. Taxes should be as neutral as possible.