Wednesday, April 11, 2001
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Wednesday, April 11, 2001 |
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Collins introduces bill to cut capital gains tax U.S. Rep. Mac Collins says investment will receive a shot in the arm if Congress passes a bill he introduced last week to cut capital gains tax rates in half. Collins' Capital gains Tax Rate Reduction Act (HR 1342) would reduce the top capital gains tax rate from 20 percent to 10 percent. Additionally, the lower rate of 10 percent for taxpayers in the 10- to 15-percent income tax bracket would be reduced to 5 percent. The measure would also repeal the five year holding rule. "This legislation is needed to spur today's ailing economy," Collins said as he introduced the bill. "From past rate reductions, we know that the economy responds to the lowering of rates. The markets become more active with a reduction in capital gains taxes because individuals gain an incentive to sell assets. Money will flow into investments which will create jobs and spur technological innovation. This will spur economic growth, as well as generate revenue for the federal coffers." Collins said history proves the power of tax relief. Cuts in capital gains tax rates under John F. Kennedy spurred the boom of the '60s, and capital gains rate reductions under President Ronald Reagan launched another long economic boom, he said. And in July 1997, Congress reduced top individual capital gains rates to 20 percent and the lower rate was reduced to 10 percent, he added. At the time, the activist group Citizens for Tax Justice warned that the capital gains tax cut would cost the U.S. Government $169 billion in revenue. "Critics of tax relief were dead wrong in 1997," Collins said. "Revenues not only did not decline by $169 billion, - after enactment, they increased from year to year to the point where the government now has strong positive cash flow." "During the tax relief debate we should trust the proven track record of tax relief instead of press releases from political groups which prefer to see government spending increase rather than return tax overpayments to hard-working American taxpayers," Collins said.
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