Number: RS21014
Title: Economic and Revenue Effects of Permanent and Temporary Capital Gains Tax Cuts
Authors: Jane G. Gravelle, Government and Finance Division 
Abstract: President Bushs current dividend relief proposal contains some capital gains relief. A capital gains tax cut appears the least likely of any permanent tax cut to stimulate the economy in the short run; a temporary capital gains tax is unlikely to provide any stimulus. Permanently lower capital gains taxes can contribute to economic efficiency in some ways and detract from it in others. Capital gains tax cuts would favor high income individuals, with about 80 percent of the benefit going to the top 2 percent of taxpayers.
Pages: 6
Date: Updated January 29, 2003