- The Washington Times - Wednesday, October 16, 2002

As early as today, the House could vote on two investor-friendly measures that would be timely and welcome irrespective of their proximity to midterm elections. If the votes in the Ways and Means Committee are any indication, however, look for few Democrats to embrace these common-sense measures.
The first bill, H.R. 1619, which the Ways and Means Committee passed in a party-line vote of 24-11, would finally take into consideration the impact of inflation since 1978 on capital losses. It would increase the amount of net capital losses that taxpayers can deduct from their income. Currently, taxpayers can deduct $3,000, an amount that hasn't changed since 1978 despite the fact that the consumer price index has nearly tripled in the interim. At a time when millions of households have incurred stock market losses, the bill would raise the net capital-loss deductible to $8,250 for married couples filing jointly; and that level would be indexed in the future for inflation. What could be more reasonable than this, especially given Congress' routine practice of raising the annual salaries of its members to account for inflation?
The other bill, H.R. 5558, which passed on a party-line vote of 24-10, significantly increases the flexibility and control that individuals can exercise over their tax-favored retirement plans, including individual retirement accounts (IRAs) and 401(k)s. Today, seniors must begin making minimum withdrawals from IRAs and 401(k)s when they turn 70-and-a-half. This bill would gradually increase the age for required withdrawals to 75. Other important provisions would accelerate the scheduled increases in contribution limits for these retirement-savings plans. The current annual limit of $3,000 for IRAs, for example, would be increased next year to $5,000, a level that will not be reached under present law until 2008. Contribution limits for 401(k)s would increase from $11,000 to $15,000 in 2003, rather than in 2006.
Rep. Charles Rangel, who would become chairman of Ways and Means if Democrats gain the majority in the House, explained that Democrats unanimously opposed both measures because both bills were designed to benefit the "same high rollers." Whom is he trying to kid? In the last 20 years, Americans with 401(k) plans have increased from 4.5 million to 43 million. Meanwhile, about 40 percent of households have IRAs. Today, 84 million Americans, or twice the number in 1983, own stocks or shares in mutual funds.
For months now, Democratic congressional leaders have been talking incessantly about the trillions of dollars that investors have lost in the bear market. Yet, Mr. Rangel and his Democratic colleagues on the committee would rather play the class-warfare card than offer some genuine relief to beleaguered investors. The rest of the House Democrats are likely to follow. The 60 percent of voters who now own equities should take note.

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