Capital Gains Tax Systems Benefit Rich, Top Earners, OECD Says

Current capital gains tax systems are undermining tax equity, creating economic distortions, and making it difficult for countries to raise revenue even as asset prices have boomed, according to a Wednesday OECD report.

Countries in the Organization for Economic Co-operation and Development tend to tax capital gains on areas like housing upon realization—when a house gains in value and is then sold, for example. Many countries apply lower tax rates on capital gains than on other forms of income or provide tax relief via exemptions.

Those tax systems essentially provide opportunities for tax avoidance and result in reduced effective ...