Say it ain't so, George - Bush administration may abandon capital gains tax cut

National Review, May 5, 1989

AS WE GO TO PRESS, there appears to be a serious danger that the Bush Administration will abandon the capital-gains tax cut.

In his debates with Michael Dukakis last fall, Mr. Bush repeatedly argued that such a tax cut would actually increase revenue. The Treasury Department estimates that this gain would be $4.8 billion; some outside estimates put it much higher.

Now the Wall Street Journal editorial page warns that Ways and Means Committee Chairman Dan Rostenkowski is insisting, as the price of an agreement on a budget package, that Mr. Bush stipulate that a capital-gains tax cut would not enhance revenue at all.

This would leave Mr. Bush politically naked, pushing for a "rich man's tax cut." And since the Bush budget includes the $4.8 billion in its proposed $14 billion in revenue increases, such an assurance would also mean that the same sum would have to be raised in other ways-i.cts., new taxes.

At present, the Bush negotiators seem to be going along with Rostenkowski, risking a repudiation of the President's unequivocal pledge not to raise taxes. We hope we're crying wolf. But Mr. Rostenkowski has a singularly wolfish grin.