[Congressional Record (Bound Edition), Volume 145 (1999), Part 5]
[Extensions of Remarks]
[Page 6542]
[From the U.S. Government Publishing Office, www.gpo.gov]



[[Page 6542]]

             CONGRESSIONAL RECORD 

                United States
                 of America



April 14, 1999





                          EXTENSIONS OF REMARKS

              CAPITAL GAINS TAX SIMPLIFICATION ACT OF 1999

                                 ______
                                 

                         HON. WILLIAM J. COYNE

                            of pennsylvania

                    in the house of representatives

                       Wednesday, April 14, 1999

  Mr. COYNE. Mr. Speaker, today I am reintroducing the ``Capital Gains 
tax Simplification Act.'' As with similar legislation I introduced last 
year, this bill would simplify the computation of capital gains taxes 
for all individual taxpayers and provide modest capital gains tax 
reductions for millions of Americans.
  As recent articles in The Wall Street Journal and Money magazine have 
observed, the 1040 Form's Schedule D has become very burdensome for 
ordinary taxpayers as they attempt to comply with the current capital 
gains tax law. Filling out Schedule D is disproportionately burdensome 
for low- and moderate-income taxpayers whose only capital gains come 
from investments in mutual funds and real estate investment trusts. It 
has been estimated that nearly half of all U.S. households now own 
mutual funds.
  The IRS estimates that a typical taxpayer with a capital gain will 
spend 6 hours and 41 minutes filling out his or her 54-line Schedule D 
form. That is over 3 hours more than in 1994. In addition to the amount 
of time involved, the chances of making an error in filling out this 
form have increased with its increased complexity. Elimination of the 
18-month holding period last year did little or nothing to eliminate 
the complexity of Schedule D. If nothing is done to change the tax 
code, the complexity of Schedule D will get even worse in 2001 and 
again in 2006, when additional capital gains tax rate categories will 
take effect; these future changes in Schedule D will make the 1998 
version look simple in comparison. Finally, increasingly large numbers 
of taxpayers will have to fill out Schedule D twice--once for the 
regular tax and once for the minimum tax.
  The Internal Revenue Service's new national Taxpayer Advocate, Val 
Oveson, agrees that capital gains simplification is needed. In his 
January report to Congress, he cited the capital gains reporting 
requirements in Schedule D as an example of unnecessary complexity 
faced by taxpayers with capital gains income from mutual funds.
  Under the legislation that I am introducing today, the current 
complicated system of different capital gains tax rates would be 
replaced with a simple 38 percent exclusion. The bill would also change 
the taxation of collectibles so that any gain or loss from the sale or 
exchange of a collectible would be treated as a short-term capital gain 
or loss. Consistent with the treatment of capital gains under current 
law, the tax rates that apply to capital gains income for regular tax 
purposes would also apply for alternative minimum tax purposes.
  Under my bill, low- and moderate-income taxpayers who invest through 
mutual funds and real estate investment trusts would no longer have to 
fill out even a simplified capital gain schedule. Rather than filling 
in 35 separate lines of information and making a number of confusing, 
error-prone calculations--as required under current law--they would 
simply total up their capital gains distributions, figure out what 62 
percent of that total would be, and then write that amount on the 
appropriate line of their tax return form.
  This bill would simplify income tax preparation for millions of 
Americans, and I believe that it would do so at no cost to the U.S. 
Treasury. While the Joint Committee on Taxation (JCT) has not yet 
determined the revenue impact of the bill I am introducing today, JCT 
estimated last year that nearly identical legislation would actually 
have raised revenue over a ten-year period.
  Congress should act this year to make the tax code less complex--and 
less burdensome--for the American taxpayer. The Capital Gains Tax 
Simplification Act would go a long way toward achieving that goal.
  Several of my colleagues on the Ways and Means Committee--including 
Representatives Rangel, Matsui, McDermott, Lewis, and Neal--have joined 
me in introducing this legislation. I urge all of my House colleagues 
to join us in cosponsoring this important tax simplification bill

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