[Congressional Record Volume 141, Number 59 (Thursday, March 30, 1995)]
[Extensions of Remarks]
[Page E744]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 CAPITAL GAINS TAX BREAKS IN REPUBICAN BILL WILL BENEFIT A PRIVILEGED 
                                  FEW

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                            HON. SAM GIBBONS

                               of florida

                    in the house of representatives

                        Thursday, March 30, 1995
  Mr. GIBBONS. Mr. Speaker, the capital gains exclusion and indexing in 
the Republican tax plan provides a huge benefit for a very small number 
of wealthy taxpayers.
  The Treasury Department tells us that only 8 percent of the 
population realize capital gains in any given year. Even among those 
with high incomes it is not universal--about 52 percent of those with 
incomes of $200,000 or more and 23 percent of those with incomes 
between $100,000 and $200,000 realize capital gains every year. Truly, 
a privileged few.
  Both the Joint Committee on Taxation and the Department of Treasury 
agree that most of the benefit of a cut in capital gains taxes will go 
to the richest 6 percent of all taxpayers: 76 percent--a full three-
quarters--of the tax benefit will go to those with incomes of $100,000 
or more.
  The Republicans have tried to characterize the capital gains tax cut 
as a major benefit to ordinary Americans, those who realize a capital 
gain infrequently when they sell Grandma's farm or a family business 
upon retirement. This is patently misleading.
  Seventy-one percent of all capital gains are realized by taxpayers 
who realize capital gains almost every year, according to the Joint 
Committee on Taxation. These financially sophisticated high rollers 
receive most of the dollars of capital gains, so naturally they are the 
ones who will get most of the benefit from the Republican plan--not 
ordinary Americans who work hard for what they earn.
  And, wealthy repeaters who realize gains almost every year are the 
ones who will be helped the most by the Republican plan.
  The Republicans have tried to characterize the Democrats' analysis as 
flawed by saying that the numbers that Democrats have quoted on the 
average benefit per taxpayer were computed on the basis of the whole 
population, instead of just taking account of those who actually 
receive the tax cuts. When the computations are done on the basis that 
the Republicans prefer, the average tax cuts are much bigger.
  Treasury Department figures show that when the total capital gains 
tax cut going to those with incomes of $200,000 or more is averaged 
over only the 52 percent of taxpayers at that income level who realize 
capital gains, the result is a tax cut of almost $7,800 per taxpayer in 
1996. If that figure simply kept pace with inflation, it would be 
$9,300 by 2002.


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