Scene: Senate Committee on Finance Hearing Room. Date: Sometime in 2012. Martha, a stylish attractive woman in her 70s, raises a shaking right hand as she is sworn in. The network cameras are notably absent. They have been told by their management to stay away. CSpan is covering another hearing and Fox News has been delayed.
Senator John Coburn (R Oklahoma) begins the questioning:
Coburn: We are meeting here to discuss the President’s proposal to raise the rate of taxation on capital gains from 15 to 23.8 percent. We understand that you have particular views on this subject.
Martha: Yes sir. I am a widow. I live in a nice retirement community inHouston, Texas. My social security check pays for most of my living expenses, and I do some part time work. But I have to cover the rest by selling off the stock I own.
Coburn: So you are one of the millions of ordinary Americans who own stock?
Martha: Yes, my late husband Sam was pretty good when it came to investments. Before he died ten years ago, he told me to hold on to my stocks as long as I could. He was particularly high on Massachusetts Investors Trust. Barron’s lists it in its “Best Mutual Fund Family,” I am told. All I can say is that Sam trusted this company. He had a big share of his assets in Massachusetts Investor’s Trust.
Coburn: How have these stocks been doing? We all know the market has been down.
Martha: My stocks have not done well since Sam died, especially the last five years. But I need more money to pay my bills, so I finally sold my Massachusetts Investor Trusts. In December, I sold $20,000 worth of shares and my broker told me that my capital gain was $2,600, and that I would have to pay a tax of $390.