Unlocking Canadian Capital

Résumé du livre

From the back cover: In the first part of this book, the author examines critically the conventional wisdom which argues that the present high capital gains tax is needed to raise revenue, assure fairness and avoid economic inefficiences. Herbert Grubel shows that the tax raises little revenue , and that lower rates are likely to increase revenue in the short run. Several experts are cited who suggest that lower rates - and even the elimination of the tax - will result in higher economic growth. This increased growth will raise other tax payments by so much that overall revenues will increase in the longer run. On the issue of fairness, the author notes that over half of all capital gains taxes are paid by Canadians earning less than $50,000 in other regular income. The tax does not fall primarily on the rich, as many believe. He also questions the fairness of the triple taxation of returns on savings: business taxes, taxes on distributed profits, and capital gains taxes. Finally, there is nothing fair about taxing capital gains due to inflation. On the issue of efficiency, he notes that capital gains tax produces a lock-in effect of capital and prevents the exploitation of profitable new investment opportunities.