The Capital Gains Tax and Business Recovery
Hoover Proposal for Study of Economic Effects
President hoover, in an address before the American Bankers Association at Cleveland, October 2, 1930, outlined various ways in which he believed the federal government could contribute to a restoration of business stability and the prevention of future depressions. Incidentally, he made the following observation: “I believe inquiry might develop that our system of taxes upon capital gains directly encourages inflation by strangling the free movement of land and securities.” This statement—read at the time as a proposal for repeal of the capital-gains tax—was enlarged upon in the annual message transmitted by the President to Congress on December 2, 1930.
It is urged by many thoughtful citizens [he said] that the peculiar economic ...