How the taxation of capital affects growth and employment

Chairman Casey, Vice Chairman Brady, and Members of the Committee, thank you for inviting me to appear today to discuss how the taxation of capital affects the economy.

This nation employs several methods for taxing capital income, both at the individual and the corporate level.  There is a massive economic literature that documents strong theoretical and empirical support for the United States to reduce its capital taxes. The consensus amongst economists on these issues has had a hit-and- miss record driving political consensus. There has been a strong bipartisan consensus regarding capital gains taxes, which were cut dramatically by Jimmy Carter in 1978, and again by Bill Clinton in 1997. Dividend taxes are also currently low, having been extended on a bipartisan basis in 2010. There has been less of a political consensus regarding the corporate tax, and the U.S.'s currents status as the highest tax country in the developed world is likely the most pressing tax policy issue of the day.

Click here to read the entire testimony as an Adobe Acrobat PDF.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Kevin A.
Hassett

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 20
    MON
  • 21
    TUE
  • 22
    WED
  • 23
    THU
  • 24
    FRI
Monday, October 20, 2014 | 2:00 p.m. – 3:30 p.m.
Warfare beneath the waves: The undersea domain in Asia

We welcome you to join us for a panel discussion of the undersea military competition occurring in Asia and what it means for the United States and its allies.

Tuesday, October 21, 2014 | 8:30 a.m. – 10:00 a.m.
AEI Election Watch 2014: What will happen and why it matters

AEI’s Election Watch is back! Please join us for two sessions of the longest-running election program in Washington, DC. 

Wednesday, October 22, 2014 | 1:00 p.m. – 2:30 p.m.
What now for the Common Core?

We welcome you to join us at AEI for a discussion of what’s next for the Common Core.

Event Registration is Closed
Thursday, October 23, 2014 | 10:00 a.m. – 11:00 a.m.
Brazil’s presidential election: Real challenges, real choices

Please join AEI for a discussion examining each candidate’s platform and prospects for victory and the impact that a possible shift toward free-market policies in Brazil might have on South America as a whole.

Event Registration is Closed
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.