What Would It Cost The United States To Raise Capital Gains Rates?
The U.S. Chamber of Commerce Center for Capital Markets Competitiveness has released a report with Ernst & Young that analyzes the economic impact of raising federal capital gains taxes. The White House and U.S. House and Senate lawmakers have raised the idea of increasing long-term rates as a way to raise revenue to pay for increased spending.
The report found such a proposal would:
- Reduce total employment by more than 215,000 jobs and wages by $20 billion;
- Reduce U.S. GDP by $35 billion or 0.15 percent;
- Lower investment in the United States by 0.58 percent; and
- Steer potential investors away from the United States to lower tax jurisdictions.
The report notes that, at 29.7 percent, the United States currently has one of the highest long-term capital gains tax rates. In fact, it is ninth among the 38 Organization for Economic and Co-operation and Development (OECD) countries and Brazil, Russia, India, and China (collectively referred to as BRIC countries).
Read the full report here.