Eliminating The Capital Gains Tax :: essays research papers

Eliminating The Capital Gains Tax     One of the major obstacles facing all entrepreneurs in the united Stateswhen starting a new air or expanding an existing one is raising keen.Here with child(p) refers to money that people invest in a business. Investment andentrepreneurship are the heart and somebody of a lively economy. There is no othereconomic task more important than investing ones capital into new ideas and newenterprises. Therefore capital raised from one person or a group ofprofessional investors remains a crucial source of funding for these role ofenterprises. In the type of economic world which is present today theopportunity for good returns on a persons money must be in abundance to allureinvestments in such ventures. Capital gains tax incomees significantly diminish thesereturns, therefore reducing the incentives to invest. Eliminating the capitalgains tax lead spark entrepreneurship and new investments in the economy, whichin turn will elev ate economic growth and plus the number of jobs. In orderto stimulate economic growth in the United States, taxes on capital gains shouldbe eliminated.     Members of Congress once considered a reduction in the capital gains taxrate from 28% to 19.8%. Combined with indexation, which is,reducing the capital gains tax by whatever amount would be a vital pro-growth steptaken by Congress. However, given the fickle and high risk nature ofinvestments and entrepreneurships, and the importance of maintaining a warring economy in a global environment, capital gains should be exempt fromtaxation altogether. A zero percent capital gains tax would attractentrepreneurial risk taking, which is very important to economic growth. Itwould entice wealthy investors to invest in a certain enterprise, which in smallnumbers would immensely increase the economic growth in the United States. Inthe Wall Street Journal the U.S. Commission on civil rights said, "Reducing thetax on ca pital gains effectively increases the flow of financial seed corn tobudding entrepreneurs." Also, from a global perspective, the United States hasone of the biggest capital gains tax rate. Depending on inflation, sometimesthe United States has the largest capital gains tax rate in the world. In acompetitive global economy a zero percent capital gains tax rate would make theUnited States a haven for capital, which in the long run will spark economicgrowth in the United States. Eliminating the capital gains tax altogether would non only promote a "boom" economy in the United States but will give the UnitedStates an edge that it needs to compete in the global world, not to mentioncreate new jobs.     The potential benefits for eliminating the capital gains tax are clear.