Clinton to Push Revamp of Capital-Gains Tax Rates

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from The Wall Street Journal,

Move is part of a broader plan to prod companies to emphasize longer-term growth.

Hillary Clinton will propose a revamp of capital-gains taxes that would hit some short-term investors with higher rates, part of a package of measures designed to prod companies to put more emphasis on long-term growth, a campaign official said.

The proposal, to be laid out in a speech later this week, is one of a number of ideas designed to tackle what Mrs. Clinton, some economists and some on Wall Street consider the overly short-term focus of corporate strategy. Other topics will include the risks and benefits of shareholder activism and the role of executive compensation.

At the center is Mrs. Clinton’s proposal to change capital-gains tax rates, the details of which are being finalized. The Democratic presidential candidate’s plan would create a sliding scale with at least three new rates that change depending on how long an investment is held, the official said.

Investments held for less than a year would continue to be taxed at regular income-tax rates, which can top out at 39.6% or more for the highest earners. For those held just a little longer—likely two or three years—the current capital-gains tax rate of 23.8% for top earners would rise. The Clinton rate, which hasn’t been finalized, would be higher than the 28% President Barack Obama proposed earlier this year for the highest earners. The Clinton campaign hasn’t ruled out taxing such investments at the regular income-tax rate.

Under current law, the capital-gains rate for investments held for at least a year is 15% for middle-income investors, and people with the lowest incomes pay no tax on capital gains.

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