Hillary Clinton proposes capital gains reform

NEW YORK, July 24 (UPI) -- Democratic presidential candidate Hillary Clinton on Friday proposed raising capital gains taxes for short-term investors in order to encourage long-term investing.

The former secretary of state said she wants to double the amount of time for the 39.6 percent top capital gains rate from one year to two years. That rate would then drop over a period of six years until it reaches the current 20 percent tax rate.

"The current definition of a long-term holding period -- just one year -- is woefully inaccurate," Clinton said in a speech at New York University. "That may count as long term for my baby granddaughter, but not for the American economy. It's no way to run a tax system."

She said the plan would combat a focus on quick profits in capital markets, CNBC reported.

"It is clear that the system is out of balance, the deck is stacked in too many ways, and powerful pressures and incentives are pushing it even further out of balance," Clinton said. "Quarterly capitalism as developed over recent decades is neither legally required nor economically sound ... and fixing it will be good for everyone."

"Real value comes from long-term growth, not short-term profits," she added. "American business needs to break from from the tyranny of today's earnings report."

Clinton said she believes "this reform is an important first step toward removing some of the incentives that push us toward quarterly capitalism."