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 Although details of the plan have yet to be finalized, it would
create a sliding rate scale based on the length of an investment,
rather than treating all assets held over a year as "long term," an
aide with the Democratic candidate's campaign said.
Under her proposal, first reported by the Wall Street Journal,
profits made by an individual selling an investment held for less
than a year would continue to be taxed at regular income rates,
which can rise to 39.6 percent for top earners, the Journal said.
Clinton's plan would raise the maximum tax rate on capital gains
made on assets held at least a year but no more than perhaps two or
three years, currently 23.8 percent, to at least the 28 percent
proposed by President Barack Obama, according to the Journal and a
brief statement from a Clinton aide.
Clinton, the favorite to win the Democratic Party's nomination for
the 2016 presidential election, has not ruled out raising it as high
as the regular income tax rate, the Journal said.
 She also would add additional time thresholds after which the tax
rate would drop, rewarding individual investors who hold assets
longer than the current one-year threshold, although some tax
experts question whether this would in turn alter a company's
investment behavior for the better.
Clinton will give more details about the plan in a speech later this
week, the Journal said.
The campaign has not said how much extra tax revenue it estimates
the proposal would raise.
"DEEP SKEPTICISM"
Supporters of such a proposal say it would discourage activist
investors from focusing on pushing for quick changes in a company to
boost stock prices at the expense of investments, including
long-term research, that take more time to bear fruit.
Neera Tanden, the director of the left-leaning Center for American
Progress think tank and a long-time Clinton adviser, said in a
report last month that this sort of reform would "provide focal
points for investors beyond a year ahead."
But some tax economists who spoke to Reuters on Monday said the
proposed reform may not have much social benefit, and overstated a
link between the timeframes of a company's investments and the
length of time for which a given investor retains stock.
"My general impression is deep skepticism," Leonard Burman, director
of the non-partisan think tank the Tax Policy Center and a former
senior tax economist in President Bill Clinton's Treasury
Department, said in a telephone interview.
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"Frankly, I don't see the logic in trying to encourage people to
hold assets for longer than they want to," he said.
He said there were already strong incentives for individuals to hold
onto assets, and the dividends they can produce, for a long time. He
also noted that vast amounts of assets are held by entities,
including non-profits, foreigners and retirement funds, not subject
to the individual capital gains tax.
Clinton's proposal comes as part of her plan to fight what she sees
as an excessive focus on quick profits in capital markets.
Several fund managers and financial planners said they did not think
the proposals would significantly change corporations' or
shareholders' behavior, although they would probably cause a small
increase in costs for brokerage firms.
Clinton's plan to revamp capital gains tax rates appears to be a
shift from her position in 2008, when she last sought the party's
nomination and vowed not to raise long-term capital gains tax rates
above 20 percent, if at all.
Asked about this shift in an online forum with the public on Monday,
Clinton wrote that "the increase in short-termism has grown in
urgency since 2008, and the urgency of our solutions has to match
it."
(Additional reporting by Amanda Becker in Washington and David
Randall in New York; Writing by Susan Heavey and Jonathan Allen;
Editing by Dan Grebler)
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