Faculty Scholarship 1994 - Present

Eliminating the Tax Cuts on Dividends and Capital Gains May Have an Adverse Affect on the Stock Market: An Economic Argument

The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) lowered the tax rates on dividends and capital gains with a sunset provision. The cuts were set to expire at the end of 2008. However, the Tax Increase Prevention and Reconciliation Act (TIPRA) extended the tax cuts through 2010. Currently, there is a heated debate about whether the tax cuts should be made permanent. Here the authors study the possible impact of repealing the dividend and capital gains tax cuts on the stock market in the current economic environment.