Posted on 09/09/2001 9:51:08 PM PDT by kattracks
WASHINGTON (Reuters) - The White House played down a report on Sunday that President Bush (news - web sites) is leaning toward a cut in the capital gains tax rate to revive the ailing U.S. economy but it left the door open a crack.
The Washington Post reported on Sunday the administration was edging toward supporting a cut in the tax on gains from the sale of investments like stocks, bonds and real estate as a way to perk up an economy that barely grew in the spring.
But Jennifer Millerwise, a White House spokeswoman, said Bush remained optimistic that the $1.35 trillion, 10-year tax cut he signed into law in June, combined with interest rate cuts by the U.S. Federal Reserve (news - web sites) Board, would do the trick.
``The president remains confident that the tax cut and the Federal Reserve's rate cuts are the right remedy and will encourage the growth needed to bring the economy back,'' the spokeswoman said.
Asked if Bush was now opposed to a capital gains tax cut, which has been promoted by congressional Republicans as a way to spur investment in the economy and to boost tax revenues, she replied: ``The president will remain open-minded.''
Some Democrats have opposed the idea, saying it favors the rich and would not provide much short term stimulus. Speaking on the ``Fox News Sunday'' program, Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat, argued instead for a cut in the payroll taxes paid by all workers to fund the Social Security (news - web sites) and Medicare systems as more likely to spur growth.
With Friday's August unemployment report showing the U.S. jobless rate jumped to a nearly four-year high of 4.9 percent, Bush said he is worried about people losing their jobs and that his administration planned to do something about it.
The economy now seems to be at a virtual standstill, having turned in its weakest performance in more than eight years with a growth rate of just 0.2 percent during the second quarter.
The Washington Post cited Bush administration officials as saying the administration is debating whether to support a capital gains tax cut as a preemptive strike against further deterioration in the economy or to wait until mid-October to see whether economic indicators are still dropping.
It said Republican lawmakers and strategists, worried their party may lose control of the House in next year's congressional elections, have been making increasingly urgent pleas for some kind of White House action.
BUSH NONCOMMITTAL
Bush was noncommittal when asked about cutting capital gains taxes this week and two top Republicans in Congress on Sunday said he had not yet thrown his weight behind the idea.
Asked on NBC's ``Meet the Press'' program if Bush supported cutting the tax, U.S. House of Representatives Majority Leader Dick Armey, a Texas Republican, replied: ``I think he does.''
``But right now the president is saying ... we have a good tax cut in place,'' Armey added. ``It's working in the economy. He is willing to be patient on that. He cautions me to be patient on that and I appreciate him on that.''
Bush was cautious on Tuesday when asked about Republican proposals to cut the tax rate to 15 percent from 20 percent for two years as a way of stimulating investment and possibly generating a quick flood of new tax revenues.
While saying he believed a capital gains tax cut would boost revenues in the short term, Bush said he wanted to see the tax cut signed into law in June work its way through the economy.
``The stimulus package that we all worked on prior to the recess is not fully in place yet,'' Bush told reporters as he met with Senate Minority Leader Trent Lott, a Mississippi Republican.
``What I'd like us to do is take a look-see to make sure that the stimulus package that we ... are implementing works,'' Bush said, adding: ``I'm open-minded.''
Lott, speaking on ABC's ``This Week'' program, on Sunday said Bush had not given him any commitment on cutting capital gains taxes. ``He hasn't committed to it to me, although I believe there's some indications in the media this morning they're looking more favorably into it,'' Lott said.
Democrats these days must feel like cheap whores. I can imagine what they were thinking when Clinton signed the Republican tax cut in 1995 that reduced the top capital gains rate from 28% to 20%.
Bet the death tax WON'T be eliminated in any way. Any takers?
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