Rostenkowski May Accept Deal on Capital-Gains Tax

Rep. Dan Rostenkowski, who traditionally has viewed the capital-gains tax preference as the ultimate plaything of the rich, is signaling a change of heart may be on the way--if the price is right.

The price might require President Bush to back away from his campaign pledge not to raise taxes. Even in that unlikely event, some members of the House Ways and Means Committee, which Rostenkowski chairs, said today that they would be reluctant to accept any such bargain, even as part of a deficit-reduction measure.

For the moment, however, Rostenkowski (D-Ill.) is indicating a willingness to at least discuss the question with Bush, a former committee colleague.

“He doesn’t like a lower tax rate for capital gains,” an aide to Rostenkowski insisted today. “But could it ever be acceptable? The answer is yes--if the President offered in return something so attractive to Democrats that they couldn’t turn it down.”

The aide said he is not sure that Rostenkowski’s position has changed all that much. Despite a long record of criticizing the capital-gains benefit, Rostenkowski “never says never,” the staff member said.

The staff of the Joint Committee on Taxation estimates that 80% of the tax cut under Bush’s capital-gains proposal would go to those with incomes of more than $100,000 a year.