Capital Gains Tax Primer 

The capital gains tax raises the hurdle for America's most productive job creators — small businesses trying to expand.

The tax works hand-in-hand with the estate tax to punish the elderly and family businesses.

• The capital gains tax is an unimportant and erratic revenue raiser.
• Americans are taxed even on gains due to inflation.
• Capital gains taxes restrict the growth of America's capital stock, the primary determinant of real wages.
• America's toughest competitors have lower or zero capital gains taxes.
• The elderly are two and one-half times more likely to pay capital gains taxes.
• Americans making less than $68,500 account for 40% of capital gains realized.

The 1997 tax package did in fact lower capital gains rates, but at the expense of increased complexity and longer holding periods. Rather than tinker with the capital gains tax, it should be eliminated.