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1 Daniel Bunn & Elke Asen, Savings and Investment: The Tax Treatment of Stock and Retirement Accounts in the OECD 1 (2021)

handle is hein.taxfoundation/ssadivt0001 and id is 1 raw text is: Savings and Investment: AX The Tax Treatment of Stock and Retirement Accounts in the OECD FISCAL Daniel Bunn Elke Asen FACT Vice President Policy Analyst No. 766 of Global Projects May 2021 Key Findings There are two layers of tax on investment income. First, corporations pay the corporate income tax on their profits. Second, shareholders pay an income tax on the dividends they receive (dividends tax) and capital gains they realize (capital gains tax). On average, in the OECD, long-term capital gains from the sale of shares are taxed at a top rate of 19.1 percent, and dividends are taxed at a top rate of 24.4 percent. To encourage long-term retirement savings, countries commonly provide tax preferences for private retirement accounts. These usually provide a tax exemption for the initial principal investment amount and/or for the investment returns. Tax-preferred private retirement accounts often have complex rules and limitations. Universal savings accounts could be a simpler alternative-or addition-to many countries' current system of private retirement savings accounts. The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and global levels. We are a 501(c)(3) nonprofit organization. ©2021 Tax Foundation Distributed under Creative Commons CC-BY-NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org