Archer Aims to Shorten Wait on Lower Capital Gains Rate

WASHINGTON —  The House’s top tax writer wants to attach to the Internal Revenue Service overhaul bill a provision to shorten the period investors must wait before qualifying for lower capital gains tax rates, congressional aides said Monday.

The proposal by House Ways and Means Chairman Bill Archer (R-Texas) could set up a last-minute confrontation over the bill with the White House. But Clinton administration officials and congressional Democrats were quiet Monday, which several congressional sources said was an indication they wouldn’t oppose a reduction in the capital gains holding period.

So far, the administration has reacted positively to the compromise IRS legislation announced last week that would strengthen taxpayers’ rights and oversight of the tax agency.

The Treasury Department last year pushed strongly for an 18-month holding period before investors would qualify for the reduced 20% capital gains tax. Treasury Secretary Robert E. Rubin argued then that the delay would discourage speculative trading.

Archer wants the holding period reduced from 18 months to 12 months.

House Speaker Newt Gingrich (R-Ga.) also “supports reducing the holding period from 18 months to 12 months and will be looking for any opportunity to do so, including in capital gains legislation he will introduce on Wednesday,” Gingrich spokeswoman Christina Martin said.