On Raising Capital Gain Taxes

  1. This split approach will lead to an increase in tax revenues from the same base of CG because the “consumption” portion of CG will be taxed at higher rates. It makes it possible to keep tax revenues flat and reduce CGTRs at the same time — thus increasing capital mobility and economic growth.
  2. The approach will incentivize the savvy investors to reinvest a bigger portion of CG than they would have otherwise and increase overall rates of investment in the economy.

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