To amend the Internal Revenue Code of 1986 to restore the preferential treatment of capital gains, and to provide for the indexing of the basis of certain assets.

Repeals provisions of the Tax Reform Act of 1986 that increased the rate of tax paid in connection with capital gains of both individuals and corporations. Treats such gain as it was treated under the Internal Revenue Code before the 1986 amendments (individual rate at 20 percent, with a 60 percent deduction allowed for long-term gain; corporate rate at 28 percent).

Amends the Internal Revenue Code to require indexing, based on the gross national product deflator, of the adjusted basis of certain assets (corporate stock and tangible property that is a capital asset of property used in a trade or business) that have been held for more than one year at the time of sale or other transfer, solely for the purpose of determining gain or loss.