I am really mystified by the insistence among Republicans that lowering the capital gains tax will help the economy.
Here is John Boehner on Fox yesterday:
If we’re really serious about creating jobs, what we ought to do is, we ought to eliminate the capital gains tax for the next two years on any equities that are purchased.
Silly question, who will pay capital gains taxes this year?
The bigger problem with Boehner’s statement is it assumes the market is sinking the economy, when infact the opposite is true.
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I don’t know John Boehner’s complete suggestion, but the one you quote just refers to Long Term Capital Gains on equity purchases. To qualify, the stocks have to be held for greater than 1 year – so we’re talking about 2009 taxes at the earliest, if by “equities that are purchased” he means “purchased after the law is passed”. And that saves individuals the 15% maximum capital gains tax, as the tax law currently stands. As for other capital gains, such as real estate, there are still a lot of properties that are down from the peak, but well above purchase prices. Selling properties to reduce taxes and raise cash could generate some capital gains taxes. That generally applies to corporations, I’d assume, since selling your residence is largely protected from capital gains taxes.