NEW YORK — The chairman of the House Ways and Means Committee has given up the idea of cutting the capital gains tax because of Democratic opposition, according to a published report today.
Rep. Dan Rostenkowski (D-Ill.) said he plans to file a $5.3-billion tax increase bill with revenue-raising provisions instead of coupling a temporary reduction in the capital gains tax with expansions of tax breaks for low-income people.
Rostenkowski told the Wall Street Journal that he encountered stronger resistance than expected from Democrats on his committee to reducing the tax.
"I never anticipated there would be as much resistance to capital gains as there was," he said.
Democrats had argued that the tax break would be too large a benefit for wealthy people and also probably would cost the government revenue in the long run.
President Bush supports the idea of cutting the capital gains tax, and Rostenkowski said his plan came after the President suggested to him, "Why don't you try to put together a package?"