The Capital-Gains Myth Lives!

In the May 26 Time, Daniel Kadlec writes about a capital-gains tax cut: “There are, of course, good reasons to like a rate cut. It … could unlock tremendous sums to be spent and further the economy–which in turn would enrich federal coffers.” Will this fallacy never die? Every dollar “unlocked” when someone sells an asset is a dollar “locked” by someone else who buys it. There may be good reasons for a capital-gains tax cut (see SLATE’s recent article and dialogue on the subject), but this ain’t one of them.