Implications of a Lower Capital Gains Tax Rate in the United States

International Monetary Fund

No 1989/100, IMF Working Papers from International Monetary Fund

Abstract: This paper reviews the literature on the revenue implications of a lower capital gains tax rate in the United States. The existing empirical research indicates that the timing of realizations is sensitive to tax changes but is inconclusive on the long-run revenue implications. No study claims that tax revenues would increase very much on a permanent basis. The paper concludes that other aspects of a lower capital gains tax rate deserves more attention, in particular its impact on resource allocation and tax arbitrage.

Keywords: WP; capital gains tax tax rate; realization elasticity; rate reduction; nominal capital capital gain; revenue implication; single tax; capital gains realization; capital gains exclusion; rate in the United States; accrued capital gains; capital gains income; Capital gains tax; Personal income; Marginal effective tax rate; Capital income (search for similar items in EconPapers)
Pages: 28
Date: 1989-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1989/100

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