End Long-Term Capital Gains Taxes

In this year’s State of the Union address, President Trump promised to expand access to employee retirement plans. It’s a laudable goal. The surge in ownership of individual retirement accounts stands as one of the more notable public policy successes of the past half-century. 

But as individual accounts have grown, so too has the complexity of navigating the rules governing these federally authorized savings plans. There’s a simpler way to encourage investment than adding another program with restrictions that inevitably limit participation: bring long-term capital gains taxes to zero. 

Congress has already carved out limited circumstances where capital gains taxes are effectively zeroed out. Policymakers should draw on these examples to design policies that better incentivize wealth creation.

Consider homeownership. Owner-occupied housing has long enjoyed a special relationship with elected officials. For generations, the American Dream has been defined by owning your own home. Various federal tax provisions are shaped with that goal in mind.