Focus Point - Capital GainsCommentary by Pete du Pont
October 04, 2001
I'm Pete du Pont with the National Center for Policy Analysis. Now that there's even more urgency to jump start the economy, I hope congressional democrats won't try to block a serious cut in the capital gains tax.
Cutting it in half, to ten percent, would be an enormous boost to the economy.
In the wake of the terrorist attacks, the market nose-dived, and investor confidence appears shaky. A big cut would both put value back in the market and increase confidence. In fact, history is on the tax cutters' side: capital gains tax cuts in 1981 and 1997 both spurred market advances and increased tax revenues.
But if republicans really want to argue from principle, as a recent NCPA study shows, they should push for eliminating the tax altogether. The idea behind the tax is an egalitarian ideological one that ignores the distinction between capital and the income produced by it. Business income is taxed twice, capital gains is a third tax, one we can live without.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, remembering terror.