Capital-Gains Tax Cut Called Break for Rich
In addition, he said, the cut proposed by President Bush and others would undoubtedly cause a loss of government revenue ``over any period of time beyond one year'' and thus would worsen the budget deficit.
``The present proposal is unfair, unwise,'' the Maine Democrat told reporters. It is ``effectively a tax break for the wealthy to be paid for by the middle class. It is a $31,000-a-year tax break for those whose income exceeds $200,000 a year.''
A capital-gains reduction also would unravel the big 1986 tax overhaul, Mitchell added. When the tax system was rewritten by Congress, capital gains was only one of several special tax breaks that were wiped out in order to allow a significant reduction of tax rates.
Under the new law, capital gains - profits from the sale of stock and other assets - are taxed at the same rate as wages and other income. Bush has proposed to reduce the rate to 15 percent.
Mitchell reasons that if a preference is restored for capital gains, pressure will increase to bring back other benefits that were ended in 1986.
In that regard, Sens. Alfonse D'Amato, R-N.Y., and Christopher Dodd, D-Conn., announced Thursday they were introducing a bill to restore tax-deductible Individual Retirement Accounts for all workers, regardless of income. The 1986 law restricted deductible IRAs only to lower-paid workers and those not covered by a company pension. …