Taxes may be at the root of the bulk of mutual funds’ dismal performance, according to a new study endorsed by the Joint Economic Committee and released this week.

The study by Lipper Research found that the biggest drag on fund performance over time is taxes, with the lion’s share going to satisfy capital gains distributions.

Congressman Jim Saxton used the results of the study to argue for tax deferral of capital gains, saying that it would benefit “many millions of investors.”

He endorsed a new policy regarding capital gains which would tax mutual fund shareholders the same way as other individual investors are taxed: when their shares are sold.

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