Long / Short-Term Capital Gains / Losses

What effect does changing the capital gains tax have on our economy?

According to researchers at the American Council for Capital Formation Center for Policy Research, in a study by the accounting firm Ernst & Young, a change in the capital gains tax has dramatic effect on the U.S. economy. For every $1 billion increase in investments, approximately 15,000 jobs are created. If capital gains tax rates increase by 5% (from 15% to 20%), some researchers believe that real growth in our economy declines by 0.05%, and employment declines by 231,000 employed people per year.


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