Thread by @Noahpinion

1/Let's have a little chat about capital gains taxes, shall we?

Biden wants to raise capital gains taxes for high-income people. This is a good move.

bloomberg.com/opinion/articl…

2/The first good thing about capital gains taxes -- as opposed to corporate taxes or payroll taxes or sales taxes -- is that you can make them very progressive, so they mostly tax high earners.

Biden wants to do exactly this.

3/The second good thing about capital gains taxes is that they won't throw the country back into recession.

Capital gains taxes are macroeconomically safer than most other kinds of taxes.

4/Opponents of capital gains taxes claim that they'll reduce financial investment.

But at a time when people are throwing mountains of cash at Dogecoin, I don't think a scarcity of financial capital is something we need to worry about.

cnbc.com/2021/04/28/dog…

5/People sometimes forget that capital gains taxes give investors a reason not to pull money *out* of the stock market.

This is probably one reason why capital gains tax hikes don't hurt stock prices.

bloomberg.com/opinion/articl…

6/And how about the impact on real business investment? There's evidence showing that dividend tax cuts (which are sort of like capital gains tax cuts) don't boost business investment.

eml.berkeley.edu/~yagan/Dividen…

7/In fact, capital gains taxes could even STABILIZE financial markets by discouraging over-trading, thus making them more attractive places for long-term patient capital to invest.

8/But capital gains taxes DO raise a lot of revenue.

A recent paper by @NatashaRSarin, @omzidar, et al. shows that these taxes are good at raising money:

nber.org/papers/w28362

9/And in the end, on top of all these economic benefits, capital gains taxes probably seem very fair to the American people.

Perceptions of fairness matter a lot!

10/So capital gains taxes have tons of advantages, and few measurable disadvantages.

Seems like a tax we should be using!

(end)

bloomberg.com/opinion/articl…