As much as they would have liked to, Congressional Republicans failed to cut taxes on capital gains when they passed their tax cuts for corporations, but the Trump regime is considering a unilateral tax cut for some of the richest people in the world.
Treasury Secretary Steve Mnuchin is exploring whether his office can bypass Congress and unilaterally cut taxes by allowing filers to adjust for inflation.
The Treasury Department could change the definition of “cost” for calculating capital gains, allowing taxpayers to adjust the initial value of an asset, such as a home or a share of stock, for inflation when it sells.
“If it can’t get done through a legislation process, we will look at what tools at Treasury we have to do it on our own and we’ll consider that,” Mr. Mnuchin said, emphasizing that he had not concluded whether the Treasury Department had the authority to act alone. [...]
Currently, capital gains taxes are determined by subtracting the original price of an asset from the price at which it was sold and taxing the difference, usually at 20 percent. If a high earner spent $100,000 on stock in 1980, then sold it for $1 million today, she would owe taxes on $900,000. But if her original purchase price was adjusted for inflation, it would be about $300,000, reducing her taxable “gain” to $700,000. That would save the investor $40,000.
This is obviously heinous even at face value, but it's even worse when you look at the bigger picture and consider exactly who this tax cut would be afforded to.
The New York Times' example of an investor who bought stock many years ago and sold it off today is an appropriate example. We've spent months discussing out the GOP's tax cuts have gone directly into the pockets of executives and wealthy shareholders in the form of corporate buybacks and dividend payments.
A unilateral tax cut on capital gains would be another tax cut on top of their previous tax cut. Executives and shareholders could pay less taxes on the earnings provided to them by the corporate tax cuts passed by Republicans just 8 months ago.
According to Trump's Alma mater, the Wharton School of Business, this unilateral tax cut would cost over $100 billion.