President Trump and Treasury Secretary Steven Mnuchin floated the idea of a $100B tax cut for Americans through a new capital gains tax change.
The administration is looking at indexing capital gains to inflation. Meaning if you bought an asset for $200,000 in 2001 and sold it in 2018 for $2 million the tax owed would be $1.8 million. When you account for inflation the $200K is $600K so the taxable profit would be $1.4 million versus $2 million.
While the New York Times says this is targeted to the wealthy, this is true however capital gains taxes do reach down to what’s left of the middle class setting up their retirement.
Given the run up in the stock markets over the last 20 years, there are many in the middle class that could fall into this category.
But of course the Times went with a class-warfare angle to the story, suggesting that its a give back exclusively for the rich. Just like the prior middle-class tax cut, this move, which may attempt to bypass the need for Congressional action, are parts of Trump’s campaign pledge to put more of the people’s resources back in their hands.
Of course the Anti-Trump forces are already out in force screaming about growing deficits as if they have nothing to do with record US debt levels.
“At a time when the deficit is out of control, wages are flat and the wealthiest are doing better than ever, to give the top 1 percent another advantage is an outrage and shows the Republicans’ true colors,” said Senator Chuck Schumer of New York, the Democratic leader. “Furthermore, Mr. Mnuchin thinks he can do it on his own, but everyone knows this must be done by legislation.”
The rollback of the economic philosophy that the few will pay for the many of the last administration, along with the changing of trade policies to put Americans first will be two of Trump’s major milestones.