Capital Gains on Renewable Energy - Time to Index
Have you noticed that in almost all of the leading finance portals, starting with Yahoo Finance and Google Finance (which is still in Beta) the industry classification doesn't list renewable energy companies seperately. They are still listed under Energy segment.
In a capitalist economy like that of US one of the easiest ways to get a technology out on the road and get attention is to get the Wall Street to rally behind it. And one of the easiest ways to do that is to first of give the renewable energy sector its due respect, exposure and platform it deserves.
Another way to drive investors and promote renewable energy companies in the investment communities is to lower the capital gains tax by, let's say, half a percentage point. Not only will this divert money to, often, cash strapped communities, the financial interests of institutional investors will drive a market generation/conversion. Also, all the capital gains for this industry segment should be indexed and inflation-adjusted, unlike the norm which is the nominal capital gains. This will induce an affectionate inventment in the renewable energy market where investors will make decisions purely for economic reasons and will not be swayed by tax considerations.
It is an unprecedented opportunity for Congress to act. With inflation being tamed for past two decades and an industry needing support, which can break the clasp of mid-East oil on USA, the Congress not only bootstrap the energy-future of this country but can also improve the fairness of capital gains tax system with minimal risk.
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