IDEAS home Printed from https://ideas.repec.org/p/ken/wpaper/1101.html
   My bibliography  Save this paper

Employment Effects of Reducing Capital Gains Tax Rates in Ohio

Author

Listed:
  • William R. Melick

Abstract

Entrepreneurial activity is a key driver of job creation, and entrepreneurs and their financiers are especially sensitive to capital gains taxes. As a result, a cut in the capital gains tax rate should be expected to stimulate job creation to some degree. We measure the magnitude of this effect by examining the treatment of capital gains across the 50 states over roughly the past 40 years. Our results suggest that a complete elimination of the taxation of capital gains realized by Ohio taxpayers would lead to the creation of 40,000 new jobs. Applying this estimate to proposals currently under discussion suggests a somewhat smaller effect.

Suggested Citation

  • William R. Melick, 2011. "Employment Effects of Reducing Capital Gains Tax Rates in Ohio," Working Papers 1101, Kenyon College, Department of Economics.
  • Handle: RePEc:ken:wpaper:1101
    as

    Download full text from publisher

    File URL: http://economics.kenyon.edu/melick/Research/OhioCapGains.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Ricardo O. Cavalcanti & Andrés Erosa, 2007. "A theory of capital gains taxation and business turnover," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(3), pages 477-496, September.
    2. Cullen, Julie Berry & Gordon, Roger H., 2007. "Taxes and entrepreneurial risk-taking: Theory and evidence for the U.S," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1479-1505, August.
    3. Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
    4. Jon Bakija, 2006. "Documentation for a Comprehensive Historical U.S. Federal and State Income Tax Calculator Program," Department of Economics Working Papers 2006-02, Department of Economics, Williams College, revised Aug 2009.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    capital gains tax rate; employment;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ken:wpaper:1101. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jay Corrigan). General contact details of provider: http://edirc.repec.org/data/edkenus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.