Publications by Topic
Topic: Capital Gains Taxes
Taxing Adjusted Gross Income Instead of Taxable Income (Article/Tax Facts)
Author(s):
Jacob Goldin , Eric Toder
The House leadership has proposed to finance health care reform with a surtax on adjusted gross income (AGI) of high-income individuals, while the president's budget would increase the two top marginal tax rates on taxable income. Income taxed at statutory marginal rates is 58 percent of AGI for all taxpayers but only 46 percent of AGI for taxpayers with income over $1 million. While personal exemptions and deductions account for most of the difference between the two tax bases for the population as a whole, capital gains and qualified dividends make up most of the difference for very high income taxpayers.
Published: 08/25/09
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Taxing Capital Gains in Australia: Assessment and Recommendations (Research Report)
Author(s):
Leonard E. Burman
One of the most vexing and contentious issues in taxation is the proper treatment of capital gains-the increase in value of an asset such as shares of company stock or a business. In principle, under an income tax, capital gains should be included in the tax base as they accrue. In practice, if they are taxed at all, capital gains are almost always taxed only when an asset is sold (or "realized") and generally at lower rates than other income.
Published: 03/25/09
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Who Pays Capital Gains Tax? (Article/Tax Facts)
Author(s):
Eric Toder
Fewer than one in seven individual income taxpayers reported taxable capital gains in 2006. Over half of taxpayers with gains had incomes below $75,000, but most capital gains were reported by very high income taxpayers. The 3 percent of returns with AGI over $200,000 reported 31 percent of AGI and 83 percent of capital gains; the 0.3 percent with AGI over $1,000,000 reported 15 percent of AGI and 61 percent of capital gains. Many more Americans accrue capital gains on corporate shares they hold within tax-deferred employer-sponsored retirement plans, but they do not pay capital gains tax on these gains.
Published: 07/31/08
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A Preliminary Analysis of the 2008 Presidential Candidates' Tax Plans (Summary) (Summary)
Author(s):
The Tax Policy Center
Tax and fiscal policy will loom large in the next president's domestic policy agenda. Nearly all of the tax cuts enacted since 2001 expire at the end of 2010 and the individual alternative minimum tax (AMT) threatens to ensnare tens of millions of Americans. While a permanent fix palatable to both political parties has proven elusive, both candidates have proposed major tax changes. This summary outlines our analysis of the 2008 presidential candidates' tax plans. The full length report is also available.
Published: 06/24/08
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A Preliminary Analysis of the 2008 Presidential Candidates' Tax Plans (Full Report) (Research Report)
Author(s):
The Tax Policy Center
Tax and fiscal policy will loom large in the next president's domestic policy agenda. Nearly all of the tax cuts enacted since 2001 expire at the end of 2010 and the individual alternative minimum tax (AMT) threatens to ensnare tens of millions of Americans. While a permanent fix palatable to both political parties has proven elusive, both candidates have proposed major tax changes. This report describes how we performed our modeling and analysis, outlines the major tax proposals, and discusses the implications of their policies for the revenue raised, taxpayer economic activity, and the distribution of the tax burden.
Published: 06/20/08
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Tax Rates on Capital Gains and Dividends Under the AMT (Article/Tax Facts)
Author(s):
Benjamin H. Harris , Christopher Geissler
Recent tax acts sharply lowered tax rates on long-term capital gains and dividend income. For millions of taxpayers, however, the alternative minimum tax limits the benefits from these cuts by increasing the effective marginal tax rates on capital gains and dividend income. The culprit is the phaseout of the AMT exemption.
Published: 03/03/08
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Tax Reform, Tax Arbitrage, and the Taxation of "Carried Interest": Testimony before the U.S. House of Representatives Committee on Ways and Means (Testimony)
Author(s):
C. Eugene Steuerle
C. Eugene Steuerle gave testimony on the taxation of carried interest before the U.S. House Committee on Ways and Means. He notes among his findings that as a matter of both efficiency and equity, capital gains relief is best targeted where tax rates are high, as in the case of the double taxation of corporate income. The case for providing capital gains relief for carried interest is relatively weak, resting primarily upon whether the administrative benefits of the simple partnership structure needs to be maintained in this arena; it does not rest upon arguments for favoring capital income, entrepreneurs, or risk.
Published: 09/06/07
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End the Break On Capital Gains (Commentary)
Author(s):
Leonard E. Burman
In this Washington Post commentary, senior fellow Len Burman explains why the capital gains tax break does more harm than good and why Congress should close the loophole once and for all.
Published: 07/30/07
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Urban Institute Book Considers Taxation of Capital Income, Illuminates Policy Issues (Press Release)
Author(s):
The Urban Institute
A new Urban Institute Press book delves into the intricacies of how the U.S. tax system deals with capital income and what switching to a consumption tax might mean. In Taxing Capital Income, some of the nation’s leading tax experts tackle three questions integral to capital income: Do we tax it? Should we tax it? Can we tax it?
Published: 06/25/07
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Taxing Capital Income (Book)
Author(s):
Leonard E. Burman , Henry J. Aaron , C. Eugene Steuerle
The question of whether to tax income from wealth has sparked debate since our country’s inception. Does taxing capital income ensure the progressivity of our system or merely discourage saving? Would switching our tax code to one that taxes only consumption be more efficient or only burden middle- and low-income people? And if we were to radically reform the way America taxes its citizens, how could we ensure that vital revenue would not be lost? Some analysts would even argue that, under our present byzantine tax system, we don’t really tax capital income at all. In this volume, eminent economists analyze the problems associated with taxing capital income and propose policy solutions, which are then challenged by their peers in informed commentary. It may not settle the debate, but policymakers, scholars, and the public will find a wealth of information and ideas to consider.
Published: 06/21/07
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