Washington Even before President Bush started talking about it, House Republicans were at work on election-year tax legislation aimed at easing the sting of stock market losses for investors and giving older people more time to build retirement assets.
Despite major obstacles and a looming congressional time crunch, Bush's recent interest in another round of tax cuts to boost the economy and restore investor confidence has brought new focus to a package lawmakers already had been planning to consider in September.
"We want to show the market and show the investor that Congress is bullish," said Greg Crist, spokesman for House Majority Leader Dick Armey, R-Tex.
The legislation would be timed for the stretch run of this year's congressional campaigns, in which control of both the House and Senate is at stake. Political strategists of both parties worry that voters' economic worries and hard-hit retirement savings could tip the balance in key races.
The emerging House package probably would include an increase from $3,000 to as much as $6,000 in the amount of capital losses taxpayers could deduct each year on their tax returns, according to congressional aides speaking Monday on condition of anonymity. The amount would then be adjusted based on inflation thereafter.
Capital losses occur when an investment, such as a stock or bond, falls in value rather than gaining. Every taxpayer now is limited to a deduction of $3,000 in a given year in losses in excess of any gains they might have had in sales of investments.
Another key piece of the plan would be to increase the age 70 1/2 under current law at which people must take distributions from 401(k) plans, company pensions, individual retirement accounts and most other retirement plans.
One proposal being circulated by a close White House ally, Rep. Rob Portman, R-Ohio, would raise the age to 75.
The aim would be to give time to older people to rebuild their assets from hits to their retirement accounts from the stock market swoon.