news & studies

NEWS

MarketWatch: How the new and higher taxes that Biden and Congress are pushing would hurt stock investors and consumers

“[These proposals] ignore the compelling rationales for special treatment of capital gains in the first place. For one, capital gains are fully taxed while capital losses are not fully deductible. And capital gains are not adjusted for inflation to reflect their real value but levied on nominal increases in price. Above all, under U.S. tax law, capital gains received by shareholders from corporate profits have already been taxed once at the corporate level.”

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Capital Gains Proposals Will Harm U.S. Competitiveness and Job Creation

“Whether one considers the Biden Administration proposals or the proposals made under the current budget reconciliation process, the U.S. capital gains rate would be the worst among OECD and BRIC countries, or just shy of that unenviable crown. Economic models and history all reach the same conclusion: significantly increasing taxes on capital gains result in significantly less capital investment, harming American growth, competition, and innovation.”

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Op-Ed & Research: The High Costs of a Tax Hike on Dividends

“The Biden administration has released a flurry of tax proposals, including a headline-grabbing tax hike on capital gains that would apply retroactively from April. Dividends would be subject to the same treatment, according to a recently released Treasury Department document. At first sight, it is easy to be distracted by the $1 million figure and surmise that only rich people will be affected, so who cares? But the harms go further than that.”

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STUDIES

Ernst & Young: The Beneficiaries of the Dividend Tax Rate Reduction: A Profile of Qualified Dividend Shareholders

25.4 million tax returns included qualified dividends in 2009, representing $123.6 billion of qualified dividends.

The tax returns with qualified dividends have the following profile:
*63 percent are from taxpayers age 50 and older,
*32 percent are from taxpayers age 65 and older,
*68 percent are from returns with incomes less than $100,000, and 40 percent are from returns with incomes less than $50,000.

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PPI: Taxing Capital in a Supply-Chain World

This analysis argues that the rates on income from capital investment should be kept low, because it is an important element of the kind of broader tax system we need: one that attracts and encourages capital investment, rather than reducing investment options by raising the cost of capital.

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