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Lower taxes on dividends and capital gains

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Tax rates on both dividends and capital gains have been cut down to historical lows. Maximum tax rate on both dividends and capital gains is now set at 15%. Policy makers agreed to such a reduction hoping to see faster economic recovery, and further job growth. These policy makers would like to get your expert opinion on this issue. Using course materials, the Internet, and Cybrary's resources answer the following questions:

Do you think lower taxes on dividends and capital gains can help hasten an economic recovery, and

Further growth in the US production and job markets? Why?

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Lower taxes on dividends and capital gains can help hasten an economic recovery?

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The information below is extracted from the following source:

http://www.cbpp.org/3-10-05tax.htm

Please visit this website for further insight on this topic. IT is an excellent and comprehensive source for all your answers.

Answer:

Th effect of dividends and capital gains tax cuts might have soem short term positive effects, but they are not useful for the long run growth of the economy due to the following reasons:

Although current research shows that some companies initiated or increased dividends following enactment of the dividend tax cut, the findings also indicate that some corporate ...

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Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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