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Article: Capital cuts: the debate over capital-gains tax cuts may finally yield dividends this year.(Dances with Bulls)
- Article from:
- National Review
- Article date:
- April 21, 1997
- Author:
CopyrightCOPYRIGHT 1997 National Review, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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THE odds seem very good that the 1997 budget battles will include some sort of broad-based cut in the capital-gains tax. The Associated Press reports that "one of Capitol Hill's biggest arguments now is not whether capital-gains taxes should be cut, but by how much and when."
The details matter. Some Democrats favor "targeted" tax relief. But efficient allocation of capital requires that investors make their decisions on the basis of economics, not political favoritism. To use tax policy to bribe investors to hold the wrong investments for too long just impairs the liquidity and mobility of capital. "Short-termism" is a hoax. Managers of firms are not influenced by ...