Connie Mack: “today I am introducing the Capital Gains Simplification Act of 1998. This legislation will significantly improve the tax…”

“today I am introducing the Capital Gains Simplification Act of 1998. This legislation will significantly improve the tax treatment of capital gains and would benefit all Americans. It would restore the one-year holding period (from the current 18 month requirement) to qualify for the lower capital gains tax rates the Republican Congress enacted last year. This simple change would dramatically reduce tax compliance costs, lessen the punitive lock-in effect on capital, and yield additional federal revenue in the first two years. Capital investment is the key to economic growth and our future standard of living. That's why we successfully fought to give the American people significant tax relief on their savings and investments last year. We reduced the top rate on capital gains from 28 percent to 20 percent. Typical taxpayers in the 15 percent tax bracket had their capital gains tax rate lowered even more--to 10 percent. Unfortunately, in order for taxpayers to qualify for lower capital gains tax rates, the Clinton Administration dictated an increase in the holding period from one year to 18 months when the Taxpayer Relief Act of 1997 was in conference. This arbitrary new holding period creates an awkward rate structure in which gains held between 12 and 18 months are taxed at higher rates. This dramatically and unnecessarily complicates tax calculations and compliance costs for taxpayers, investment firms, and the IRS.”