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Article: Capitol gains. (capital gains tax legislation)
- Article from:
- National Review
- Article date:
- October 27, 1989
CopyrightCOPYRIGHT 1989 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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REASON prevailed over egalitarian rhetoric as 64 House Democrats defected from the McGovernite leadership, voting to reduce the onerous tax on capital gains. The benefits of a less punitive tax are well understood. High taxes have discouraged investors from selling assets, resulting in a loss of tax receipts. With tax rates on the immediate income from junk bonds now identical to those on the uncertain future gains from stocks in new companies, investors have begun preferring debt to equity. In response, companies have taken on dangerously heavy debts and retired equity through leveraged buyouts, thus reducing taxable profits as well as taxable capital gains. Against all ...