Senator Joe Lieberman has written letters to Senate Finance Committee Chair Max Baucus and Ranking Member Charles Grassley, and to incoming Director of National Economic Council Lawrence Summers, requesting that two tax provisions be added to the economic stimulus bill:

The first proposal would help shore up .. home values and improve the functioning of credit markets by removing a tax impediment to private investment in mortgage-backed securities. The proposal would amend the market discount tax rules, which inappropriately treat gain on the disposition of certain discounted debt as ordinary income rather than capital gain. Under the proposal, gain on the disposition of deeply discounted mortgage-backed securities purchased in 2009 would qualify for capital gains treatment. By increasing private sector demand for mortgage-backed securities, the proposal would reduce the need for the federal government to intervene in financial markets with taxpayer dollars.

The second proposal would help distressed regions … that are struggling with high unemployment and a rash of foreclosures by expanding the New Market Tax Credit (NMTC). The NMTC promotes capital formation and creates jobs by stimulating private investment in low-income urban and rural communities. Investors receive a tax credit for investing in qualified community development entities. By leveraging state funds and private investment, the NMTC has generated over $50 million in investment in low-income areas of Connecticut. …  Every $1 of federal tax revenue foregone generates over $14 of investment in projects in low-income communities. Unfortunately, the amount of credit authority is capped at $3.5 billion and will expire at the end of 2009. Senator Lieberman's proposal would double the cap to $7 billion and extend it through 2010.