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Mutual fund executives are stepping up lobbying efforts aimed at pushing the Bush administration to amend tax laws regulating capital gains payments from mutual funds, The Wall Street Journal reported.
President Bush has reportedly put mutual fund tax changes on the back burner focusing more on the administrations efforts to privatize social security, but a couple of congressmen have pledged their support to sponsor legislation next year that will benefit the mutual fund industry.
The legislation, which has been proposed by congressmen Rep. Jim Saxton (R., N.J.) and Rep. Paul Ryan (R., Wis.), will enable mutual fund shareholders who reinvest their capital gains to postpone taxes on the distributions until the shares are liquidated. More than 90% of all capital gains generated by funds have been used to repurchase new shares.
Mutual funds have been a longstanding proponent of capital gains tax relief and is likely to support lobbying efforts for the proposed legislation. Researchers note that the $7.6 trillion mutual fund industry is expected to generate billions of dollars in capital gains taxes.
