The following article is provided courtesy of CCH, Inc.
The current method of taxing mutual funds investors is discriminatory, unfair and economically counterproductive, according to a new study released on April 23 by the Joint Economic Committee (JEC). The study, "The Taxation of Mutual Funds Investors, Saving and Investment," highlights a reported defect in the tax law that imposes capital gains taxes on mutual fund investors although their shares have plunged in value.
"This study shows the need to change the tax law so that it does not impose punitive taxes on ordinary middle-class taxpayers attempting to save for retirement, education, medical and other needs," said Rep. Jim Saxton, R- N.J., Joint Economic Committee Chairman. "This feature of the tax law is one of the worst examples of how our tax system is biased against personal saving and investment, and is literally economically counterproductive," he said.
Representative Saxton on January 3 introduced a bill (HR 168) in the House that would amend the Internal Revenue Code to allow individuals an exclusion from gross income for certain amounts of capital gains distributions from regulated investment companies.