The White House and Congress are once again at loggerheads over the issue that has divided them since President Bush took office.

The issue is whether to cut the capital gains tax rate. Although it is one of the smallest components of the tax structure, it has produced some of the most heated exchanges in budget negotiations, according to officials familiar with the proceedings.

The success of the talks, which recessed until Monday morning after a three-hour session at Andrews Air Force Base last night, may rest on whether Bush will give up his pursuit of a cut in the capital gains tax rate or accept higher income taxes for the wealthy in order to win on capital gains.

The question of fairness hangs over the entire discussion.

Republicans say the richest Americans already shoulder a big enough portion of the overall U.S. tax burden and that their share has actually increased during the last decade. Americans who rank among the top fifth in income now pay 58.1 percent of all federal taxes, up 2.4 percentage points during the 1980s, according to House Ways and Means Committee data.

But Democrats point out that the increase came about only because the richest Americans make a lot more money than they did at the beginning of the decade. In fact, the richest Americans have gotten richer even after paying taxes. Democrats point to their own favorite figures, which show that the richest 10 percent of Americans average $106,638 a year in income after paying federal taxes, an increase of 44.6 percent since 1980. During the same period, the more than half of all Americans who earn less than $30,000 a year after taxes saw that figure decline.

When other factors are held constant to show the true impact of tax changes in the 1980s, the effective overall federal tax rate for the richest 1 percent of Americans dropped from 31.6 percent to 27.2 percent. Meanwhile, the effective overall federal tax rate for Americans in the middle fifth of the income scale rose from 17.5 percent to 20.3 percent.

"Economists don't have a lot to say about how progressive the tax code should be," said Emil Sunley, an economist for the Deloitte Touche accounting firm. "In the nation as a whole there is strong consensus in favor of a progressive tax system, but not on how progressive it should be."

It is hard to change the progressivity of the tax code much without attacking income tax rates, say tax experts, and the administration is adamantly opposed to such a change. The 28 percent top tax rate appears to "be etched in granite just below the Treasury secretary's window," Sunley said.

As a result, any change in the tax structure's progressivity is expected to be relatively minor.

But the symbolism of a capital gains tax cut is strong. It has become one of Bush's personal crusades. During his 1988 campaign, Bush ignored the advice of campaign advisers and advocated a cut in the capital gains rate. The advisers feared it would further mark him as the candidate of the elite. As president, Bush has continued to advocate the cut, and during the budget talks at Andrews Air Force Base, Republicans have been pushing it even though it has slowed progress toward a fiscal agreement.

Bush Friday brushed aside questions of whether he would give up the capital gains tax cut. "Everybody in the summit knows of my commitment to it," he said. "It is something that is fundamentally important to continued growth in the economy."

Advisers to the president say he sincerely believes the capital gains tax cut would boost economic growth and increase federal tax receipts -- claims disputed by many economists. Last month, the nonpartisan Congressional Budget Office concluded that recent analyses of the economic impact of cutting the capital gains tax rate "taken together . . . raise doubt about whether {it} can be counted on to significantly increase" gross national product

Many Democrats call the measure a tax break for the rich, for some of the Republican Party's biggest campaign contributors and for Bush's old friends in the oil business.

The dispute "comes, in our view, under the heading of fairness," said House Speaker Thomas S. Foley (D-Wash.). "The distributional effects of a unilateral reduction in capital gains {taxes} without other tax action would be to provide very substantial benefits to the richest and most economically comfortable segment of American society."

Proponents of the capital gains tax cut remain hopeful. They say they have widespread, if muted, support among rank-and-file Democratic lawmakers. And they note that while Democratic leaders say they are opposed to the cut, they have said so in a way that one lobbyist said "leaves an opening you could drive a truck through."

Democrats say they would accept the capital gains tax cut if it were tied to an increase in taxes for the wealthy. "There could be a linkage {of} the two," Foley said. But otherwise, "it would be extremely difficult to accept the capital gains tax."

Republicans deny that such a trade is in the offing. Instead, they say, proposed increases in luxury taxes and limitations on the deductibility of state and local income taxes are adequate ways of balancing the package.

"If it is progressivity like they are saying, then this takes care of it," one administration official said. "If it doesn't, then it is just politics."

But the Congressional Research Service notes that limits on state and local tax deductions would have wildly uneven effects on taxpayers, depending on where they live. Political analyst Kevin Phillips said two of the five states with the most electoral votes do not have any state income taxes -- Florida and Texas.

Moreover, Phillips said, the cost of losing a portion of state and local tax deductions is "peanuts" compared with a change in the income tax rates. He said countering capital gains with a luxury tax or limits on tax deductions would be a "phony balance."