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Unformatted text preview: and more, most likely within the following 3 years. A capital gains tax cut appears the least likely of any permanent tax cut to stimulate the economy in the short run; a temporary capital gains tax cut is unlikely to provide any stimulus. (Larson, 2003) Permanently lower capital gains taxes can add to economic efficiency in some ways and detract from it in others. Capital gains tax cuts would favor high income individuals, with about 80% of the benefit going to the top 2% of taxpayers. A fiscal policy can stimulate the economy in the short run only if it increases aggregate spending. There are causes to anticipate that capital gains tax cuts would have the least simulative consequence on the economy of virtually any fiscal stimulus option. (Larson, 2003) Reference: ------Larson, J. (2003). "Tax cuts: Issues and analyses" Nova Science Publishers, New York------...
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This note was uploaded on 12/04/2011 for the course ECONOMICS 201 taught by Professor Rcollier during the Spring '10 term at Portland CC.
- Spring '10