October 11, 2001

Would a Capital Gains Tax Cut Stimulate the Economy?

PDF of fact sheet
HTML of full report
PDF of full report

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On September 20, the Center on Budget and Policy Priorities released a report, Would a Capital Gains Tax Cut Stimulate the Economy? The report examines a proposal being promoted by some Congressional leaders to reduce the maximum tax rate on long-term capital gains from 20 percent to 15 percent. While proponents of a capital gains cut have traditionally claimed it would provide long-term (rather than short-term) benefits for the economy, they now argue it will provide a short-term economic stimulus. The proposal, however, would do little for the economy in either the short or the long term while yielding a bonanza for the highest-income taxpayers. The report's findings include: