Top Economists Just Warned Latest Biden Tax Hike Would Have One Huge Consequence for Small...

https://fee.org/articles/top-economists-warn-biden-capital-gains-tax-hike-would-have-one-huge-consequence-for-small-businesses/?utm_source=email&utm_medium=email&utm_campaign=2020_FEEWeekly
“The White House is considering raising the capital gains tax rate to 39.6 percent on people earning $1 million and over,” Fox Business reports. For context, the capital gains tax is “a tax on the growth in value of investments incurred when individuals and corporations sell those investments,” according to Investopedia.

The current top capital gains rate is 20 percent, so this hike would amount to roughly a doubling of the tax. And in 13 states, such as New York and California, with their own levies on capital gains, Biden’s proposal would result in some residents facing rates of more than 50 percent.
But top free-market economists interviewed exclusively by FEE warn that the entire economy, not just the wealthy, would suffer from such a significant capital gains tax increase. In particular, they warn that heightened taxes on capital gains would hamper investment in small businesses.

“Doubling the top capital gains tax rate from 20% to 40% may make for a good progressive talking point but its economic effect would make it hard for small businesses and hardworking Americans, as it would create a significant reduction of financing for small businesses,” Mercatus Center senior fellow and economist Veronique de Rugy said.