Legal Commentary

A Stray Thought: Why Not A Tax Cut to Incentivize Purchases of Toxic Assets?

By Big Tent Democrat

Before we throw trillions of dollars to Wall Street with the Geithner Plan, why not try throwing billions of dollars of tax credits to Wall Street and other private players by providing a lower tax rate (say 10% or even 5%) on capital gains on their investment in the toxic assets (or all mortgage backed securities?)

Obviously such a plan would create an artificially higher price for these assets due such special tax treatment. But so does the Geithner Plan. And the cost to the government (and taxpayers) would surely be less. The talk from Geithner and his supporters is that there is insufficient incentive for the private sector to invest in the toxic assets, due to current market conditions. How about trying a less expensive incentive first? Anyway, just a though off the top of my head.

Speaking for me only

Full post as published by TalkLeft on March 23, 2009 (boomark / email).