Capital Gains Tax Cut Could Boost Business
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With the Clinton administration and Congress apparently headed toward a cut in capital gains taxes, sales of companies could ratchet up, said David H. Troob, chairman of the Geneva Cos., an Irvine merger and acquisition services firm.
The mergers and acquisitions market is already very active, Troob said, with company owners looking for ways to cash out of the businesses they’ve built. Reduced taxes on profits from these deals “should drive it even further,” he said.
According to a recent Geneva survey, 73% of nearly 4,500 owners of mid-size businesses said they would accelerate their “exit planning” if the capital gains tax rate was lowered. The values of their businesses might also increase, if buyers take into account improved after-tax returns, Troob said.
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Patrice Apodaca covers economic issues for The Times. She can be reached at (714) 966-5979 and at patrice.apodaca@latimes.com
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