Public Papers - 1989
Letter to the Members of the House of Representatives on Proposed Capital Gains Tax Legislation
The House of Representatives will soon have the opportunity to vote on legislation that will ensure continued economic prosperity and provide powerful incentives for investment and jobs.
I firmly believe a capital gains reduction is the right policy for all Americans. This is an opportunity to restore an incentive for saving and investment, to create new jobs and build a better future. All Americans will benefit.
Middle-income Americans who invest wisely, farmers selling off a piece of the family farm, the elderly widow who is living off the assets she and her husband struggled to accumulate, the couple who planned ahead and saved so their children could go to college, the small business entrepreneur who sank his savings in an idea he alone believed would work -- these are not wealthy Americans. Over 70 percent of the taxpayers who report capital gains have other income less than ,000.
In this intensely competitive world, almost all major industrial nations tax capital gains lightly or not at all. This is important to the American factory worker whose job may be on the line unless his company can bring down its capital costs.
Reestablishing a capital gains differential, which was part of our tax laws for over six decades, provides the needed incentives for those willing to take a risk on new products and research that are the result of American ingenuity.
Reducing the capital gains tax means Americans who have capital gains at some time in their lives -- about half of our population -- will be able to keep more of their savings to invest for the future.
You will be offered an alternative to the Jenkins-Archer capital gains proposal. No matter how you dress it up, that alternative is a tax increase -- plain and simple. That's no alternative, and my response will be equally plain and simple -- veto.
The timing for this vote is excellent. The Nation is enjoying its 82nd consecutive month of economic expansion -- the longest in peacetime history. Support for a capital gains differential is a vote to continue that prosperity, and I ask for your support when the Jenkins-Archer proposal comes to a vote.
Note: Identical letters were sent to each Member of the House of Representatives.