Taxing Capital Gains

Barron’s published my Letter to the Editor on Joe Biden’s proposal to increase taxes on capital gains for those earning over $1 million.

Taxing Capital Gains

To the Editor:
Concerns about the potential impact on U.S. equity prices resulting from Joe Biden’s proposal to tax capital gains at higher ordinary-income rates can be mitigated by noting that this would apply only to incomes above $1 million (“Nothing Worries This Stock Market—Not Even a Possible Tax Hike,” Up & Down Wall Street, Oct. 9). Also, though tax-optimization strategies for high-income individuals could result in asset selling prior to the tax increase going into effect, the shares sold could be quickly repurchased while establishing a higher cost basis. The 30-day “wash sale” rule that applies to realized losses does not apply to capital gains.

David I. Kass,
University of Maryland, College Park, Md.

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