PRESIDENTIAL DEBATEOctober 16, 1996
JIM LEHRER: This section - question? Yes, ma'am, on the back row. This is for the president.
PAMELA JOHNSON: Mr. President, my name is Pamela Johnson and I'm a landlord. My question is does your party have any future plans to reduce the capital gains tax, especially for retired Americans?
PRESIDENT CLINTON: First of all, we have a big plan to reduce capital gains tax when people sell their homes. Part of my tax package - which is paid for in my balanced budget plan - would exempt up to half a million dollars in gains for people when they sell their homes, which I think is the biggest capital gains benefit we could give to most ordinary Americans.
We also have capital gains now for people that invest in new small businesses and holding investment for five years. It was part of our other economic plan, and these are things, I think, that will go a long way toward helping America build a stronger economy and a better tax system.
I think the most important thing to emphasize, though, is that we also have to help people in other ways to build a strong economy, and we can't have any tax cut that's not paid for. One of the big differences between Senator Dole and myself is that I told you how I'm going to pay for every penny off the tax cuts I recommend. We worked hard to bring this deficit down, and that's helped people in the real estate business because the interest rates are lower, we've got home ownership at a 15-year high, we've got this country going in the right direction.
So we can have a tax cut, but my priority would be to help the families who need it with child-rearing and education and buying a first-time home and helping for health care costs. So from - your business, helping and buying the first-time home, exempting the capital gains on the sale of the home would be the most important things that you ask about. Thank you, Pamela.
JIM LEHRER: Senator Dole?
MR. DOLE: Well, Pamela, what the president didn't tell you, that all his tax cuts expire at the year 2000, but all his increases go on forever. That's the liberal approach, you know; give you a little tax cut, give you a couple of years, but then make the tax increases go on forever. So the net tax increase in his plan is somewhere between $60 and $80 billion.
We have in the Dole-Kemp economic plan - unless your home is worth over $500,000, and if it is, I appreciate it, congratulate you - but in any event, no tax. And that's a good idea they saw and they picked it up and put it in theirs, but it's only temporary. Ours is permanent. Ours is a good plan: create jobs and opportunities.
The capital gains rate? Cut it in half, cut it from 28 percent to 14 percent. There are $7 trillion in assets locked up in America. If we cut the capital gains rate, I'm told every day - I had a letter from a former constituent in Kansas saying, "I want to sell property in California, put it in my business in Kansas; I can't because the capital gains rate's too high."
We need to get the economy going. That'll help Social Security. That'll create more jobs. That'll help people who want to get off welfare. It's the American way.
PRESIDENT CLINTON: Before Senator Dole left the Senate, he and Mr. Gingrich also were recommending that we pass these tax cuts only insofar as we could pay for them, and we all assume that the tax cuts will be permanent, but we have to prove we can pay for them. After he left the Senate, we abandoned that. That's why most experts say that this tax scheme will blow a huge hole in the deficit, raise interest rates, and weaken the economy, and that will take away all the benefits of the tax cut with a weaker economy. That's why we have to balance the budget. And I'll tell you how I'm going to pay for anything I promise you line by line. You should expect that from both of us.