Britain’s Laffer Curve for Capital Gains Tax On Top Earners

Wrong! - Selling for less than the purchase price creates a capital loss. Selling for the purchase price creates no capital gain, and capital gains do not require the asset to double in price.

Wrong! - The news clip reports that revenue fell. The tax increase was followed by lower revenue.

Wrong! - The news clip says they moved abroad, not that they did not sell their assets, or incurred capital losses, and selling more assets in Britain would tend to increase capital gains tax revenue.

Wrong! - On the upward-sloping side, a higher tax rate increases revenue. At a 24% tax rate, revenue is lower than it was at 20%, so 24% cannot be the peak of the Laffer curve. Every tax rate lies somewhere on the Laffer curve.

Wrong! - Lower, not higher tax rates, move a country down the upward-sloping side. Britain is not likely to be on the upward-sloping side of its Laffer Curve.

Wrong! - Since a 24% tax rate is already on the downward-sloping side of the Laffer curve, any tax rate above 24% lies even further to the right and therefore cannot be the revenue-maximizing tax rate. A zero capital gains tax rate would raise no capital gains tax revenue.