WASHINGTON (HedgeWorld.com)–The U.S. Senate's vote for the Jobs and Growth Tax Relief Reconciliation Act of 2003 came with a last-minute kicker–a manager's amendment containing various revenue enhancers including the abolition of the current 60/40 tax treatment for gains and losses on futures and options transactions.
The Futures Industry Association, Washington, opposes any such change. Its president, John M. Damgard, said Tuesday that he is very curious about the origins of the idea.
"Somebody in the bowels of the treasury has a drawer full of what they call 'revenue enhancers'–what we call tax increases–and this one comes out of the drawer regularly," he said. Furthermore, the "scoring" (i.e. the calculation of the amount of revenue the amendment would raise) is suspect. "Funny arithmetic sometimes is necessary to make things work," he said.
In this case, it "worked" in the sense of securing passage but just barely. Despite the revenue-enhancing amendments, proposed by Sen. Chuck Grassley (R-Iowa) in order to firm up the commitment of wavering senators worried about ballooning the deficit, the bill carried only 51 to 50, with the tie-breaking vote of Vice President Dick Cheney.
