Debating tax code reform on tax day. The Online NewsHour Special Report on Social Security Reform. The President has vowed to veto the legislation but says he's willing to consider something more modest. Tonight, we begin a look at some of the key points of contention. Margaret Warner focuses on the capital gains tax.
Capital gains are the profits earned from the sale of assets like stocks and real estate.
The Republican bill would reduce the taxes individuals pay on such gains by 2 percentage points. For most taxpayers the current 20 percent capital gains tax would drop to 18 percent. For those in the lowest income tax bracket the capital gains rate would drop from 10 percent to 8 percent. The bill also would index capital gains for inflation. President Clinton signed a capital gains tax cut in 1997, but he opposes this one.