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Article: Taxing the consumption of capital gains.
- Article from:
- Virginia Tax Review
- Article date:
- January 1, 2009
- Author:
CopyrightCOPYRIGHT 2009 Virginia Tax Review. 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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This piece traces the history of the capital gain concept, and then the policy arguments for a lower rate on capital gains, to argue for an express requirement that the lower rate for capital gains be available only if the gains are reinvested. Consumed capital gain, the Article argues, is not real capital gain within the original understanding or tax policy arguments. Indeed since capital gain is available for consumption, a viable alternative is to repeal the capital gain preference and engineer investment tax incentives to the front end of investment.
TABLE OF CONTENTS
I THE HISTORICAL CONCEPT OF CAPITAL GAINS 481
A. American ...