President Donald Trump said he was “very seriously” considering a capital gains tax cut, a move he decided on last September after saying it would not do enough to help the middle class.
“We are also considering a capital gains tax cut, which would create a lot more jobs,” Trump said Monday at a White House news conference.
The president may unilaterally cut the rate of 20% long-term capital gains without Congress, but some advisers tell him he could issue an executive order that would cut taxes for investors if they sell assets. The movement, known as indexing capital gains for inflation, adjusts the original purchase price of an asset when it is sold, so that no tax is paid on valuation linked to inflation.
Reducing capital gains taxes by a rule as an executive order would likely pose legal challenges, a concern that told asked the administration of former President George HW Bush to drop a similar plan.
Read more: The Tax Bid wants to double down and Trump would slash: QuickTake
Trump, in the face of an accident on Capitol Hill over coronavirus relief, recently revamped his presidency to bypass Congress. Trump on Saturday issued an executive directive that would delay the deadline to file payroll taxes for millions of workers by the end of the year. He said he hopes Congress will forgive that tax debt, but absent legislation, these payments will still be mandatory until the extended due date.
Donald Trump speaks at a news conference at the White House in Washington, DC on August 10.
Photographer: Stefani Reynolds / CNP / Bloomberg
Trump had previously considered indexing capital gains for inflation after he was hired to do so by some conservatives, including Senator Ted Cruz and Americans for tax president President Grover Norquist, but ruled out the idea last year, saying “it’s not what I like fan. “
Most of the benefits would go to high-income households, with the top 1% receiving 86% of the benefit, according to estimates in 2018 by the Penn Wharton Budget Model. The policy could reduce tax revenue by $ 102 billion in a decade, the model found.
Trump also said he was considering a “cut in income tax on middle income.” Congress would have to pass legislation to make any reductions in tax rates, which probably won’t happen before the end of the year.
Treasury Secretary Steven Mnuchin said Monday that he has spoken with “several Democrats,” but not with Second Chamber member Nancy Pelosi or House Speaker Chuck Schumer since her last negotiation session ended Friday without a breakthrough.
(Updates with Mnuchin on incentive talks in last paragraph. An earlier version corrected the spelling of Norquist’s last name in the sixth paragraph.)
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