Domestic Taxes

Tax writers set to examine capital gains rate

The panels are synching up for the third time this Congress to discuss the issue, one of dozens of tax provisions set to expire at the end of the year. The maximum capital gains rate is 15 percent but would rise to 20 percent on Jan. 1 without congressional action. 

“It has been more than 25 years since the last major tax reform occurred,” Baucus said. “The world has changed drastically in that time, and America’s tax code hasn’t kept up.”

Baucus and Camp have said they are pressing their committees to deal with “fiscal cliff” tax issues — Ways and Means is crafting a measure that would extend all the George W. Bush-era tax rates for another year. 

“It’s time we had a tax code for the 21st century, one that can create jobs, spark innovation and expand opportunity,” Baucus said. 

“I look forward to working with Chairman Camp as we work on a balanced, common-sense plan to reform the tax code and create the jobs we need to improve our economy.”

In addition, a 3.8 percent tax will be imposed on net investment income earned by certain individuals next year. The scheduled restoration of the “Pease limitation” on itemized deductions next year will impose a roughly 1.2 percent marginal rate on capital gains, bringing the top federal rate on capital gains to 25 percent in 2013, according to the committees. 


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