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Article: A Capital Gains Tax Holiday
- Article from:
- The Washington Post
- Article date:
- August 8, 1989
- Author:
CopyrightThis material is published under license from the Washington Post. All inquiries regarding rights should be directed to the Washington Post. (Hide copyright information)
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The House Ways and Means Committee is apparently inclined to
report favorably a proposal by Rep. Ed Jenkins (D-Ga.) to reduce the
capital gains tax rate for two years and then index the tax system so
as to tax real and not inflationary gains. There is a case for
indexing. But the yo-yo aspect of the proposal-dropping and then
increasing the capital gains rate-is the worst tax policy idea of the
1980s. A capital gains tax holiday will discourage investment,
exacerbate our fiscal mess and confer large windfalls on those who
need them least.
The rationale for capital gains tax cuts is that they encourage
people to undertake risky investments. Perhaps. But is hard to see
how a temporary ...