Trump ‘Seriously Mulling’ Capital Gains Tax Cut
President Trump on Monday said he’s “very seriously” considering slashing the capital gains tax via executive order, according to Bloomberg.
“We’re looking at also considering a capital gains tax cut, which would create a lot more jobs,” said Trump during a White House news conference.
The president can’t unilaterally cut the 20% long-term capital gains rate without Congress, but some advisers tell him he could issue an executive order that would slash tax bills for investors when they sell assets. The move, known as indexing capital gains to inflation, adjusts the original purchase price of an asset when it is sold so no tax is paid on appreciation tied to inflation. –Bloomberg
The move would undoubtedly face legal challenges by Democrats – which is apparently why President George H.W. Bush’s administration ditched a similar plan, according to the report. Though given Trump’s weekend executive order bypassing Congress to renew lapsed coronavirus relief funds and delay payroll taxes – it’s hard not to wonder if the capital gains tax announcement is designed to goad his political opponents into openly opposing actions that benefit US taxpayers during an election year.
Last year, Trump passed on the idea of indexing capital gains to inflation despite urging from conservatives such as Sen. Ted Cruz (R-TX) and Americans for Tax Reform President Grover Norquist – saying “it’s not something I love.”
Most of the benefit of the tax cut would go to America’s highest earners, with the top 1% receiving 86% of the benefit, according to Bloomberg, citing 2018 estimates by the Penn Wharton Budget Model – and could reduce federal tax revenue by $102 billion over a decade.
Trump is also considering a “cut in the middle income tax” which would require Congress to pass legislation – a move which is unlikely to happen before the end of the year.