Jim Bunning: “Since 2007, investors have lost $1.7 trillion in stock market values. Nearly half these losses are taxable accounts and…”

“Since 2007, investors have lost $1.7 trillion in stock market values. Nearly half these losses are taxable accounts and their owners are subject to a $3,000 limit on capital losses. The way this limit works is that no matter how much money you lose in stocks or real estate, you are only allowed to deduct $3,000 per year against other income. The remaining loss is ignored. Given the state of the markets, millions of taxpayers have stock losses that far exceed $3,000. Nevertheless, the Tax Code will treat these people as though they earned much more during the year. For an example, a family that earns $100,000 and pays $30,000 in Federal and State taxes has a tax rate of 30 percent. If the family loses $40,000 in savings and it is only able to deduct $3,000, it will push the family's effective tax rate up to 48.5 percent. The $3,000 fixed limit on capital losses was last adjusted in 1976. Since 1977, inflation has eroded the value of the limit by more than 71 percent. My amendment would adjust the limit for inflation, increasing it to $15,000 for any losses incurred this year.”