P.M. BRIEFING : Loss Seen in Capital-Gains Cut

WASHINGTON — President Bush’s proposed capital-gains tax cut would worsen the federal budget deficit by $11.4 billion over the next five years and continue to lose revenues far into the future, congressional economists said today.

The estimate by the staff of the Joint Committee on Taxation disagrees markedly with one by the Treasury Department, which says the tax cut would actually boost revenues by $12.5 billion over five years.

The two estimates agree that the capital-gains reduction would raise tax collections this year and next. The congressional estimate puts the 1990-91 gain at $3.9 billion; the Administration forecast is for a $5.4-billion increase.

Capital gains are profits from the sale of stock and other investments. The realization, or cashing in, of such profits grows with the overall economy, a report by the congressional tax staff said.

“Consequently, if the economy continues to grow in years beyond 1995, we would predict the revenue losses in those years would exceed the revenue loss for 1995, and would grow in magnitude each year thereafter,” the report said.