re:  Capital gains revenue?  A myth

In his article on the capital gains tax, Scott Burns is more correct than he realizes.  His thesis is that because of capital losses due to the financial collapse of the past year that included the broad stock indexes, government could (as then-candidate Barack Obama advocated) raise the tax rate on capital gains and not "get a cent in capital gains tax revenue because most people don't have any gains to realize and pay taxes on."  However, he misses another point:  increases in the tax rate on capital gains never increase the revenue collected by the government.

In the past 65 years, the taxation rate on capital gains has been increased twice:  in 1968 and 1986.  Not only did the capital tax revenues actually decrease in both cases, it took at least 8 years in each case before the revenue collected even equaled that collected in the year prior to the increase.  In the case of the capital gains tax rate cuts implemented in 1979, 1997, and 2003, tax revenues increased.

The evidence is clear:  raising the capital gains tax does not increase revenue to the government.

Sincerely,
Dave Smith
Houston, TX