Subject: Tax simplification suggestion
Comment: KC Madden
5567 Alpine Drive
Kunkletown, PA 18058
April 15, 2005
Replace Capital Gains with a Transaction Tax
Dear Tax Reform Panel
I have a comment to submit aimed at simplifying the tax code in the area of capital gains.
It consists of eliminating capital gains on stock transactions entirely and replacing it with a transaction tax to be collected by the trading firms and forwarded to the Treasury on a regular basis (weekly or monthly). The transaction tax rate should be revenue neutral when compared to capital gains revenue over the past 10 years.
• Tax preparation time is simplified by entirely removing capital gains on stocks and bonds
• Because the revenue replacement is a transaction tax, revenue to the federal government is collected regularly from the traders instead of annually from taxpayers, thus smoothing cash flow.
• The stock market becomes simpler to understand for potential new investors, thus encouraging greater participation.
• Government revenue from stock trades becomes more predictable as its based on trading volume instead of stock market gains and losses.
Thank you for providing me with this opportunity to comment.