President Clinton is about to propose his own version of a capital gains tax cut according to reports. But economists say his version misses the point: the purpose of such a cut is to stimulate the economy, which his proposal will barely do.

The problem is that the president will ask for a cut which will apply only to those with adjusted gross incomes of less than $75,000. Moreover, it would expire in just a few years. It would seem to be more a political ploy that allows him to give a cut to four-fifths of those who report capital gains and still bash the rich.

Critics make these points:

• Based on 1994 tax returns, cutting off capital gains relief at $75,000 excludes more than 80 percent of all capital gains realizations.

• It doesn't help people who realize a one-time capital gains -- say from the sale of a house, farm or family business -- since their income for that year only may be much more than $75,000 even though they are middle class.

• Thus, Clinton's plan won't attract to more productive uses money that is now sitting in tax shelters and in stagnant investments, nor will it yield a large infusion of fresh capital or cash freed up by the sale of lagging stocks.

• It will contribute little, if any assistance in efforts to boost the economy's anemic 2 percent to 2.5 percent annual growth rate.

True, it would apply to 78.5 percent of all returns that report gains. But excluding participation by those with incomes above $75,000 is just one more example of disadvantaging the more successful and productive achievers among us. These families, incidentally, already bear the heaviest tax burdens -- as any tax expert can confirm.

Critics of the Clinton plan contend that a real tax cut would generate much higher economic growth. That new prosperity would mean better lives for millions of Americans, including those currently making less than $75,000. It would also yield higher revenues for the government and help reduce the deficit.

Source: Editorial, "Clinton's Fake Capital Gains Cut," Investor's Business Daily, June 14, 1996.