Question: The tax system has a 50 tax rate on gains
The tax system has a 50% tax rate on gains from risky investments, and also allows a deduction at a 50% rate of any losses from risky investments. Which tax policy would increase risk taking more: (a) allowing those deductions on any losses, or (b) limiting the deduction only to losses that offset other gains (no loss offset)?
Answer to relevant QuestionsThe Job Growth and Tax Relief Reconciliation Act of 2003 (JGTRRA) reduced the rate at which capital gains are taxed, but it included a “sunset” provision whereby the tax rate returned to its original level in 2009. How ...Senator Crawford, arguing in favor of capital gains tax cuts, says that reducing capital gains tax rates will stimulate entrepreneurial activity. Senator Long, arguing against these tax cuts, suggests that they will ...In some states, a local government that reduces its tax base receives additional aid for local public good provision from the state government. Why will cities be more likely to offer tax breaks in this circumstance? Why are ...You conducted a research study and found that corporations that finance their investments with a larger ratio of debt to equity tend to pay higher rates of interest to lenders. Why do you think this practice occurs? Reducing corporate tax rates is often considered as a policy tool to enhance investment. How could the presence of tax loopholes diminish the relationship between corporate tax rates and corporate investment?
Post your question