Fleischmann proposes two-year repeal of capital gains taxes
Bill is the second piece of legislation introduced by the freshman congressman
Rep. Chuck Fleischmann introduced his second piece of legislation on Wednesday, a bill that would eliminate taxes on capital gains for two years.
The two-page bill, called the "Growing Jobs Through Capital Act of 2011," originates from Fleischmann's seven-point jobs plan, released in late September. In a phone call with Nooga.com, Fleischmann said his proposal would be a way to "literally kick-start the economy" from the private sector.
"So many businesses and individuals have told me that they're frustrated with the tax policy and want some predictability," Fleischmann said. "In the past, whenever taxes on capital gains have been reduced, it has really helped the economy. I think a two year moratorium on capital gains taxes is a start."
To back up his claim, the congressman cited a recent study from the National Center for Policy Analysis—a conservative think tank which promotes private and free-market alternatives to government regulation and control. The review, released in 2008, claims a reduction in taxes on capital gains during the Bush Administration had positive effects on both the economy and government finances.
"The study showed that 50 percent or more of people who filed their tax returns with capital gains made less than $50,000 a year," Fleischmann said. "This is going to help Americans all across the economic spectrum, and will lead to a great influx of capital from people who are too afraid to put their capital at risk right now."
There's room in that economic spectrum for Fleischmann, who reported a Wells Fargo Investments account valued between $500,001 and $1,000,000 earlier this year. According to House financial disclosures, the account generated between $15,001 and $50,000 in income for the congressman, a portion of which came from capital gains.
Fleischmann said he had no concerns about how proposing legislation that would benefit him personally could be perceived negatively by his constituents.
"I have not cast a single vote with any of my financial concerns involved, nor have I ever even thought of doing so," he said. "My financial concerns aren't even on my radar when I'm thinking about legislation… When I speak to my constituents, this is one of the ideas that I heard and was able to harvest from them."
Fleischmann's proposal comes as a 12 member bipartisan "super committee" meets behind closed doors in Washington, attempting to find a way to eradicate $1.2 million from the national deficit over the next decade. With a Nov. 23 deadline looming, any solution from the committee is likely to include reforms to the current tax code.
Dr. Bruce Oppenheimer, professor of public policy and education at Vanderbilt University, said the timing of the proposal led him to suspect that Fleischmann's bill was intended more for appearances to his base rather than a serious attempt for change.
"Any changes in the tax law are going to be things that are worked into the big super committee deal," Oppenheimer said. "Unless they're immediate or urgent, other tax laws won't even be considered. Fleischmann is not the first person to suggest cutting or eliminating capital gains taxes, so I suspect this is more of a position-taking thing at this point."
Fleischmann, who was voted into office one year ago this month, said he intends to introduce future legislation stemming from his jobs plan, but did not specify what the proposals would address or when they would be introduced.
