Capital Gains Tax Simplification Act of 1998

Capital Gains Tax Simplification Act of 1998 - Amends the Internal Revenue Code to provide that, if for any taxable year a non-corporate taxpayer has a net capital gain, 40 percent of such gain shall be a deduction from gross income regardless of whether or not the taxpayer itemizes other deductions.

Repeals the tax preference for exclusion for gains on the sale of certain small business stock.

Amends the Taxpayer Relief Act of 1997, with respect to maximum capital gains rates for individuals, to repeal the allowance of an election to recognize gain on assets held on January 1, 2001.