European Stars and Stripes (Newspaper) - September 16, 1989, Darmstadt, Hesse                                Saturday september 16, 1989 the stars and stripes Page 5. Capital gains tax Cut in House panel Washington a the House ways and Means commit lec thursday approved by a 19-17 Vole a Cut in the capital gains lax handing president Bush a major Victory Over the objections of democratic leaders. Six conservative democrats sided with the i $ republicans on the panel in the closed door vote to defeat several killer amendments by liberals who claim the Cut is a Giveaway to the Rich. The capital gains amendment to the budget Bill co sponsored by reps. De Jenkins. D-ga., and Bill Archer. R Texas. Would reduce the maximum tax rate on profits from sales of assets from the current 33 percent to 19.6 percent for 2v years. After that the rate would be raised to 28 percent but assets would be indexed so tax would not be paid on any increased value caused by inflation. The Overall result would be similar to the effect of a Campaign proposal by Bush to reduce the capital gains rate to is percent without indexing. House majority Leader Richard Gep Hardt. Do. Made Clear that demo cratic lenders intended to fight it As a class Issue when the Bill reaches the full House for action later this month. This was George Bush s idea to help out his wealthy friends and the people who Are going to wind up paying for it arc the Middle class Gephardt said. Public citizen a consumer lobbying group founded by Ralph Nader Crit Ici cd the action As an undisguised political gift to the  the budget Bill also includes provi Sions approved by the committee which addresses several controversial issues including the medicare catastrophic health insurance plan and child care. Over five years lower income families would receive an additional $16 billion in tax credits and stale administered Grants aimed at improving child care for working parents. Also in the Bill in response to complaints from retirees Are significant changes in catastrophic health insurance for older americans. It would Cut in half the surtax paid by the wealthiest 40 per cent of retirees and increase the Flat monthly catastrophic Premium paid by All but the poorest medicare Benefi  Bill would allow retirees to turn Down catastrophic coverage but Only i they opt out of medicare part a which pays physicians fees. The Bill would raise about $5.3 billion in new taxes mostly by changing tax rules governing corporations. The tax treatment of capital gains has varied Over the years. For Many years the rate was half of whatever the Rale was on Ordinary income. In 1978, Congress reduced the Maxi mum capital gains rate from 49 percent to 28 percent. In 1981. The maximum rate was Cut further to 20 percent. In the major overhaul of 1986. Congressional tax writers believed All income should be taxed at the same rate no matter what the source and on those grounds made the capital gains rate equal to the regular income rate which is the situation today. Gephardt said the democrats were looking at several alternatives to bring before the full House including increasing the tax Rale on High incomes and the plan advanced by sen. Lloyd Belsen d Texas. Chairman of the Senate finance committee to return to More generous tax Breaks for individual retirement a  democrats on the ways and Means committee also failed in their efforts to continue an effective 33 percent tax rate for incomes above $44,900 for single taxpayers and above $74,850 for married couples filing jointly. Aids treatment protest demonstrators lie in front