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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (530922)	11/20/2009 1:06:06 PM
From: TimF	Respond to of 1585853

Capital gains tax cuts tend to increase revenue at first (as more people realize gains), then cut revenue (a lot of those gains where pushed forward so later you have less gains to realize, and those that are realized pay taxes at a lower rate), then increase it again (more investments get made, when the anticipated rates are lower, also you reduce the incentive to hold on to the investment and not realize the gain and the incentive to invest in legal or illegal tax shelters). Its possible, esp. when the cut is from fairly high rates, that the longer run increase starts before the shorter run increase runs out, and you don't have a middle period with lower revenues. Right now, the mess of expiration of the Bush Tax Cuts and the pending Estate Tax nightmare scenarios make it really difficult to have any sense of what rate cuts of any kind would do. If it does phase out for a year, and just that one year, and then higher rates take over, it could create a real incentive to try to make sure sickly, old, wealthy relatives, don't make it past December 2010.