Ehrlich on Washington column, June 8, 1997

MEWS FROM Robert L. Ehrlich, Jr. Second Congressional District of Maryland 1 407 York Road, Suite 304 Lutherville, Maryland 21093 3 1 5 Cannon House Office Building Washington, D.C. 20515 EHRLICH ON WASHINGTON Week of June 8, 1997 By Congressman Robert L. Ehrlich, Jr. REDUCING CAPITAL GAINS TAXES BENEFITS EVERYONE When my colleagues and I finished up the hard-won bipartisan balanced budget agreement last week, I was pleased to see that a reduction in the capital gains tax remained an important part of the package. Despite efforts by some House liberals — most notably Minority Leader Dick Gephardt (D-MO) -- to push for more spending on social welfare programs, most Republicans and moderate Democrats stood together and supported a tax cut that will significantly benefit working families. I am sure you have heard the rhetoric before: capital gains tax relief, according to Mr. Gephardt and his fellow liberals, only benefits “the rich.” In a recent speech on the House floor, Mr. Gephardt claimed that the “top 1 percent of taxpayers” will benefit disproportionately from the bipartisan tax cut plan, and that working families will lose out. This claim is patently false. Indeed, as the specific provisions of the tax cut bill have yet to be written, it remains unclear where Mr. Gephardt is getting his numbers. Look at the facts, and you will see that cutting capital gains taxes benefits families of every income bracket. The truth is that every person who sells a house, every small business owner who sells a business, every worker who cashes in a stock option, and every retiree who sells an asset and plans to live on the proceeds is affected by the capital gains tax rate. Most of these people can hardly be called rich. According to the 1993 Joint Economic