Tags: Republicans | Want | Cut | Capital | Gains | Tax

Republicans Want Cut in Capital Gains Tax

Tuesday, 04 September 2001 12:00 AM

Led by Senate Minority Leader Trent Lott, R-Miss., Republicans in Congress are considering a two-year capital gains tax cut to give the economy an immediate boost. Republicans have not decided on details, but the tax rate could be temporarily reduced from 20 percent to 15 percent.

But Democrats in Congress are blasting Republicans for what they call eating up too much of the "surplus" with the $1.35 trillion tax cut, potentially giving Congress the excuse to use money from the Social Security surplus to pay for costly government programs.

"I think our answer to the Democrats is, we need to cut taxes again," said Sen. Phil Gramm, R-Texas, at a news conference announcing his decision not to seek re-election. "I think we need to cut the capital gains tax rate."

Economists advising the White House said the plan might give Republicans a double win: It might help prop up the economy and add money to the federal budget in the short term and help Republicans avoid the appearance of "raiding" funds raised by Social Security. The income to the Treasury would come as investors quickly liquidated stocks to take advantage of the temporary tax break.

President Bush would not specifically endorse the controversial plan, but said he would consider it.

"I think I agree with the assessment that a capital gains tax relief would pile up some revenues early in the process," Bush said. "What I'd like us to do is take a look-see to make sure that the stimulus package that we've now - are implementing works. And I'm open-minded."

Republicans are considering the cut in capital gains taxes as the economy continues to show signs of flagging, but just after the Congressional Budget Office last month reported that Congress might "have" to use $9 billion of surplus money raised by Social Security. While the government budget still has a surplus of more than $150 billion, that money comes from Social Security payments that both parties have agreed should not be spent and instead used to reduce the debt.

Democrats say Bush created a budget crunch.

"The issue here, and the focus of all of our concern, is that the president's policies will make the choices in the future far more difficult: bigger benefit cuts, greater tax increases, or more debt," said Senate Budget Committee Chairman Kent Conrad, D-N.D. "That's why this all matters."

But Bush warned Tuesday that Social Security checks would still be coming in the mail.

"I hope the budget - the appropriations process discards the old-style politics of trying to scare seniors," Bush said. "Our seniors have got to know that every Social Security promise will be fulfilled, and Social Security checks will arrive on time, and that there's not much difference in the overall numbers than what we proposed, what some others have proposed."

Copyright 2001 by United Press International.

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Led by Senate Minority Leader Trent Lott, R-Miss., Republicans in Congress are considering a two-year capital gains tax cut to give the economy an immediate boost. Republicans have not decided on details, but the tax rate could be temporarily reduced from 20 percent to 15...
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2001-00-04
Tuesday, 04 September 2001 12:00 AM
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