November 27, 2006
A Start for Bipartisan Tax Reform: Indexing Capital Gains for Inflation
For immediate release
Media contact: Brian Phillips (202) 464-5102
The nation may revisit the issue of capital gains taxation now that the Democratic Party controls the Congress. Republicans have been almost unanimous in their view that the rate cuts on capital gains and dividends in May 2003 were, among all the Bush tax cuts, two of the most successful at boosting the economy.
Democrats have mostly held the opposite view, asserting that compared to the rates on wages, capital income has long been under-taxed. In one respect, though, the parties may be able to agree on a reform to capital gains taxation: indexation of capital gains for inflation.
In the current Congress, it is H.R. 6057, sponsored by Representatives Mike Pence (R-IN) and Eric Cantor (R-VA). Although an unlikely prospect for enactment on its own, such a bill could become part of a fundamental tax reform plan.
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