Republicans are pledging to keep a lid on the tax rates for investment income and maintain a prized tax break for charitable donations, as part of their party's election platform set to be voted on in Tampa, Florida, this week.
The platform, a version of which was made available to news organizations, backs a 15 percent tax rate on capital gains and dividends and calls for eliminating these taxes for lower and middle-income taxpayers, in line with the stance taken by Republican presidential candidate Romney.
The position is less bold than one that has been put forth by Congressman Paul Ryan, Romney's pick as vice presidential running mate. One option in Ryan's 2010 policy blueprint known as the "Roadmap for America's Future" would kill these investment taxes altogether.
The platform - a statement of principles that is not binding on Republican candidates - will be voted on, and likely approved, later in the week by delegates to the Republican National Convention.
President Barack Obama and many Democrats want to let the tax rates on capital gains rise to 20 percent, from the current 15 percent, in 2013. They see it as a small bump that can help raise revenue while Washington focuses on deficit reduction.
Obama has called for pushing taxes on investment dividends back to ordinary income rates, which now go as high as 35 percent, when the 15 percent tax rate expires in December.
Conservatives generally favor low or no taxes on investment income, arguing that such taxes impede economic growth by driving capital and potentially jobs overseas.
Romney himself has benefited because the money he still earns from his time at Bain Capital, the private equity firm he co-founded, is taxed at investment income levels and not the individual income tax rate, which would be much higher.
About $13 million of his Bain income over the last two years was subject to the preferential 15 percent rate, according to his campaign.
The Republican party platform also says that donations to charitable organizations should continue to be tax deductible. That deduction is worth about $52 billion annually, according to the Congressional Research Service.
The capital gains tax break amounts to about $71 billion a year, according to CRS.
The Republican party platform is silent on many of the hot-button tax issues expected to come up during a tax reform debate which may take place in 2013.
"There's still enormous uncertainty over which tax breaks Romney would retain and which ones he'd abolish," said Greg Valliere, an analyst for investors at Potomac Research in Washington.
"Can Romney and Ryan stonewall on this subject through the election? They probably can, but this is frustrating for investors," Valliere said.
Taxes in general are a flashpoint in the election with big changes looming at the end of the year if lawmakers fail to act.
Low federal income and investment tax rates enacted in 2001 and 2003 by Republican President George W. Bush and renewed for two years by Obama will expire on Dec. 31, setting up a showdown some are calling "taxmaggedon" after the elections.
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