This year's capital gains payouts are expected to be the largest since the boom of the late 1990s, and while that's good news for the mutual fund industry and the 39 million U.S. households that invest in them, it's increasingly unclear whether legislation currently pending in Congress will provide any relief from what could be a shocker of a tax bill.

It's unlikely that investors will benefit this year from the GROWTH Act, a bill now on the House of Representatives and Senate floors that would exempt investors from taxation on capital gains if they automatically reinvest. And while optimism for the bill was high just months ago, a growing national deficit, the war on terror and hurricane relief efforts are draining the government's revenue streams and placing the GROWTH Act's future in jeopardy.

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