Bentsen Is Examining Ways for Senate To Cut Capital Gains Taxes This Year
WASHINGTON -- Chairman Lloyd Bentsen of the Senate Finance Committee is examining ways to reduce capital gains taxes, increasing the chances that such a cut could be enacted this year.</br></br>In a telephone interview yesterday, the Texas Democrat said he intends to ask his tax-writing panel to devise a bill that would raise federal revenues about $8 billion in fiscal 1990, which begins Oct. 1. That would be enough to meet deficit-reduction targets while extending several soon-to-expire tax breaks, including the credit for research and development expenditures.</br></br>As part of the tax package, a cut in the capital gains tax "is one of those things we'll have to take a look at," Sen. Bentsen said, citing President Bush's eagerness to include it.</br></br>The Finance Committee chairman specifically praised a possible method of cutting capital gains taxes advanced by the House's top tax-writer, Rep. Dan Rostenkowski (D., Ill.). The senator said he is willing to take a "serious look" at an unusual part of Mr. Rostenkowski's proposal that, in certain circumstances, would define the taxable gain on long-held capital assets as a percentage of the price at which the assets are sold. He also said he is "intrigued" by Mr. Rostenkowski's plan to reduce capital gains taxes to offset the effects of inflation.</br></br>Sen. Bentsen said many lawmakers find the Rostenkowski plan deficient because it would apply only to newly acquired assets. But he noted that it would be difficult to include currently held assets, too, because doing so would substantially increase the long-term cost of such a plan. "Then the problem is limiting the cost," he said.