In a world in which House Minority Leader John Boehner (R-OH) and his follower Republicans (correctly) recognize the need for an economic stimulus package yet control the content of the legislation that gets enacted into law, he would reduce capital gains taxes to zero to "help Americans rebuild their 401(k)s." In fact, it is only in a parallel universe that this scheme would actually work. In the really real world in which you and I live, 401(k) gains are taxed as ordinary income (i.e. income tax, not capital gains tax, applies)*. Reducing cap gains taxes to zero will do absolutely nothing to boost 401(k)s. *Unless the plan participant was born before January 2, 1936: In this case he or she can opt to have the taxable part of a lump-sum distribution resulting from participation in the plan before 1974 taxed as a capital gain at rate of 20% Image by Flickr user Marxchivist used under a Create Commons license.