I 
110TH CONGRESS 
2D SESSION 
H. R. 5908 
To amend the Internal Revenue Code of 1986 to provide a permanent zero 
percent capital gains rate for individuals and corporations. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 24, 2008 
Mr. HERGER (for himself, Mr. DREIER, Mr. SAM JOHNSON of Texas, Mr. 
BRADY of Texas, Mr. CANTOR, Mr. LINDER, Mr. CAMPBELL of Cali-
fornia, and Mr. CONAWAY) introduced the following bill; which was re-
ferred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
a permanent zero percent capital gains rate for individ-
uals and corporations. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. ZERO PERCENT CAPITAL GAINS RATE FOR IN-
DIVIDUALS AND CORPORATIONS. 
(a) ZERO PERCENT CAPITAL GAINS RATE FOR INDI-
VIDUALS.— 
(1) IN
GENERAL.—Paragraph (1) of section 
1(h) of the Internal Revenue Code of 1986 is 
amended by striking subparagraph (C), by redesig-
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nating subparagraphs (D) and (E) and subpara-
graphs (C) and (D), respectively, and by amending 
subparagraph (B) to read as follows: 
‘‘(B) 0 percent of the adjusted net capital 
gain (or, if less, taxable income);’’. 
(2) ALTERNATIVE MINIMUM TAX.—Paragraph 
(3) of section 55(b) is amended by striking subpara-
graph (C), by redesignating subparagraph (D) as 
subparagraph (C), and by amending subparagraph 
(B) to read as follows: 
‘‘(B) 0 percent of the adjusted net capital 
gain (or, if less, taxable excess), plus’’. 
(3) REPEAL OF SUNSET OF REDUCTION IN CAP-
ITAL GAINS RATES FOR INDIVIDUALS.—Section 303 
of the Jobs and Growth Tax Relief Reconciliation 
Act of 2003 shall not apply to section 301 of such 
Act. 
(b) ZERO PERCENT CAPITAL GAINS RATE FOR COR-
PORATIONS.— 
(1) IN GENERAL.—Section 1201 of the Internal 
Revenue Code of 1986 is amended by redesignating 
subsection (b) as subsection (c), and by striking sub-
section (a) and inserting the following new sub-
sections: 
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‘‘(a) GENERAL RULE.—If for any taxable year a cor-
poration has a net capital gain, then, in lieu of the tax 
imposed by sections 11, 511, 821(a) or (c), and 831(a), 
there is hereby imposed a tax (if such tax is less than 
the tax imposed by such sections) which shall consist of 
the sum of— 
‘‘(1) a tax computed on the taxable income re-
duced by the amount of the net capital gain, at the 
rates and in the manner as if this subsection had 
not been enacted, 
‘‘(2) 0 percent of the adjusted net capital gain 
(or, if less, taxable income), 
‘‘(3) 25 percent of the excess (if any) of— 
‘‘(A) the unrecaptured section 1250 gain 
(or, if less, the net capital gain (determined 
without regard to subsection (b)(2))), over 
‘‘(B) the excess (if any) of— 
‘‘(i) the sum of the amount on which 
tax is determined under paragraph (1) 
plus the net capital gain, over 
‘‘(ii) taxable income, plus 
‘‘(4) 28 percent of the amount of taxable in-
come in excess of the sum of the amounts on which 
tax is determined under the preceding paragraphs of 
this subsection. 
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‘‘(b) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) IN
GENERAL.—The terms ‘adjusted net 
capital gain’ and ‘unrecaptured section 1250 gain’ 
shall have the respective meanings given such terms 
in section 1(h). 
‘‘(2) DIVIDENDS
TAXED
AT
NET
CAPITAL 
GAIN.—Except as otherwise provided in this section, 
the term ‘net capital gain’ has the meaning given 
such term in section 1(h)(11).’’. 
(2) 
ALTERNATIVE
MINIMUM
TAX.—Section 
55(b) of such Code is amended by adding at the end 
the following new paragraph: 
‘‘(4) MAXIMUM RATE OF TAX ON NET CAPITAL 
GAIN OF CORPORATIONS.—The amount determined 
under paragraph (1)(B)(i) shall not exceed the sum 
of— 
‘‘(A) the amount determined under such 
paragraph computed at the rates and in the 
same manner as if this paragraph had not been 
enacted on the taxable excess reduced by the 
net capital gain, plus 
‘‘(B) the amount determined under section 
1201.’’. 
(3) TECHNICAL AMENDMENTS.— 
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(A) Section 1445(e)(1) of such Code is 
amended by striking ‘‘35 percent (or, to the ex-
tent provided in regulations, 15 percent)’’ and 
inserting ‘‘0 percent’’. 
(B) Section 1445(e)(2) of such Code is 
amended by striking ‘‘35 percent’’ and inserting 
‘‘0 percent’’. 
(C) Section 7518(g)(6)(A) of such Code is 
amended by striking ‘‘15 percent (34 percent in 
the case of a corporation)’’ and inserting ‘‘0 
percent’’. 
(D) Section 607(h)(6)(A) of the Merchant 
Marine Act, 1936 is amended by striking ‘‘15 
percent (34 percent in the case of a corpora-
tion)’’ and inserting ‘‘0 percent’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to taxable years ending after the date of 
the enactment of this Act. 
(2) WITHHOLDING.—The amendments made by 
subparagraphs (A) and (B) of subsection (b)(3) 
shall take apply to dispositions and distributions 
after the date of the enactment of this Act. 
Æ 
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