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28 Sep 2019
When someone owns an asset (such as a share of stock) that rises invalue, he has an "accrued" capital gain. If he sells the asset, he"realizes" the gains that have previously accrued. Under the U.S.income tax, realized capital gains are taxed, but accrued gains arenot.
a. Explain how individuals' behavior is affected by thisrule.
b. Some economists believe that cuts in capital gains tax rates,especially temporary ones, can raise tax revenue. How might this beso?
c. Do you think it is a good rule to tax realized but not accruedcapital gains? Why or why not?
When someone owns an asset (such as a share of stock) that rises invalue, he has an "accrued" capital gain. If he sells the asset, he"realizes" the gains that have previously accrued. Under the U.S.income tax, realized capital gains are taxed, but accrued gains arenot.
a. Explain how individuals' behavior is affected by thisrule.
b. Some economists believe that cuts in capital gains tax rates,especially temporary ones, can raise tax revenue. How might this beso?
c. Do you think it is a good rule to tax realized but not accruedcapital gains? Why or why not?
a. Explain how individuals' behavior is affected by thisrule.
b. Some economists believe that cuts in capital gains tax rates,especially temporary ones, can raise tax revenue. How might this beso?
c. Do you think it is a good rule to tax realized but not accruedcapital gains? Why or why not?
Retselisitsoe PokothoaneLv10
28 Sep 2019
