Tax Breaks for Capital Gains Threatened in Bipartisan Deficit-Cut Proposal

[xchrom]

http://www.bloomberg.com/news/2011-07-20/senate-debt-cutting-plan-yields-tax-cut-tax-increase-in-yardstick-shuffle.html

The bipartisan deficit-reduction plan gaining momentum in the U.S. Senate would likely require lawmakers to curtail or end the preferential tax treatment of capital gains and dividends.

The proposal from the so-called Gang of Six doesn’t mention capital gains and dividends. The plan’s goals for income tax rates, federal revenue and progressivity would likely require Congress to raise tax rates on investment income, said tax analysts who favor and oppose preferential tax rates on capital gains and dividends.

The proposal, which would lower income tax rates and broaden the tax base, is similar to plans issued over the past year by a bipartisan fiscal commission and the Bipartisan Policy Center in Washington. Those plans suggested taxing capital gains and dividends as ordinary income for the first time since 1990.

“You cut marginal tax rates and you still want to have a progressive tax system, you have to tax capital gains,” said Leonard Burman, a professor of public affairs at Syracuse University in New York who helped write the Bipartisan Policy Center’s report.

[mmonk]

1. It will fail even if passed.

Another bush would just cut the rates again and meanwhile, you've already lowered the mariginal rates at the top further.