House Unit Votes Inflation Factor For Capital Gains: Capital Gains Change Voted
The House Ways and Means Committee yesterday voted to allow, for the first time, an automatic inflation adjustment for homeowners and investors on the taxes they pay on capital gainsÛÓthe profits from the sale of stocks or other property.</br></br>The proposal, which could eventually open the way for automatic inflation adjustments on other federal taxes as well, was approved on a 21-to-16 voteÛÓin part with the support of committee liberals, who hope to load down a conservative substitute for President CarterÛªs tax plan in an effort to-defeat it.</br></br>The measure, which would affect only those capital gains realized after January 1980, would virtually wipe out the present tax on capital gains and ultimately cost the Treasury billions of dollars in lost tax revenues. The bill would apply to stocks, homes and equipment.</br></br>At the same time, the committee refused, on a vote of 24 to 11, to approve a proposal to provide relief to taxpayers for the new Social Security tax increases that went into effect in January. The proposal would have allowed taxpayers a credit on income tax to offset the new taxes.</br></br>The surprise approval of the capital gains measure took committee leaders aback. Immediately after the vote, Hep. A1 Ullman (D-Ore.), the chairman, tried to adjourn the session, but was voted down. Later, liberals banded together to block any reconsideration of the vote.