Stan Veliotis proposes to repeal the foreigner’s exemption on long-term capital gains

Stan Veliotis, associate professor and CPAP co-director, authored “Equating U.S. Tax Treatment of Dividends and Capital Gains for Foreign Portfolio Investors.” The paper is to be published in The American Business Law Journal in 2019. He points out that long-term capital gains as well as dividends on stock owned by U.S. citizens and residents are taxed at the same rate; however, for foreign portfolio investors, the taxation for these two types of rewards remains dramatically different from each other, with the capital gain being fully exempt. Extending finance theory and prior normative tax research, this article argues that foreigners’ portfolio dividends and capital gains should be taxed in the same manner because they are economically equivalent and emanate from the same source. Moreover, Veliotis provides and discusses empirical data for support of the repeal of the foreigner’s exemption.