A bill to amend the Internal Revenue Code of 1986 to retain a capital gains tax differential, and for other purposes.

Repeals provisions of the Tax Reform Act of 1986 relating to the taxation of both individual and corporate capital gains. Provides that the Internal Revenue Code shall be applied and administered as if such provisions had not been enacted. (The capital gains tax rate for corporations would generally be 28 percent.)

Amends the Internal Revenue Code to revise the method of calculating the deduction for capital gains of noncorporate taxpayers. Allows a capital gains deduction equal to: (1) 100 percent for assets held five years or longer; (2) 60 percent for assets held for between three and five years; and (3) 40 percent for assets held for between one and three years.

Amends the Deficit Reduction Act of 1984 to increase the holding period required for long-term capital gain tax treatment of property acquired after 1986.