Taxes

Trump “Very Seriously” Considering Another Tax Cut For Rich Shareholders

JM Ashby
Written by JM Ashby

Trump and the Republican party already handed a trillion dollar windfall to corporations and their wealthy shareholders when they passed their tax cuts in December of 2017, but Trump is "very seriously" considering an even more targeted tax cut for the rich.

Speaking to reporters yesterday evening, Trump said he's considering a tax cut for capital gains; the profits from the sale of capital assets like stocks and bonds, among other things.

But Trump can't unilaterally cut tax rates. What he can do is something worse; he could index capital gains so shareholders pay substantially less.

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.

Revamping capital gains taxes through a rule or executive order likely would face legal challenges, a concern that reportedly prompted former President George H.W. Bush’s administration to drop a similar plan.

It probably won't surprise you that the biggest proponent of this idea is Trump's top economic adviser and man who is always wrong, Larry Kudlow.

In some if not most cases, this could actually result in an even bigger windfall for shareholders than if tax rates were slightly reduced.

Needless to say, rich shareholders and people with significant assets don't need a tax cut. They're already among the richest people in the world and the stock market is doing quite well right now. In fact, the stock market has become almost completely disconnected from the real economy of average Americans. And you don't have to take my word for it; that's what the CEO of the largest investment bank in the world says.

You probably recall that this is not the first time Trump and his cabinet lackeys have floated the possibility of unilaterally cutting taxes for the rich, but this time could be different.

I don't know if he'll do this, but as the election draws closer I expect to see Trump increasingly throw shit at a wall in desperate attempts to change the narrative or improve his poll numbers. Trump's executive orders covering payroll taxes and unemployment benefits are an escalation and possible indication that the hinges are gone from the door.

  • Draxiar

    Lest anyone forget that Agent Orange made it a habit to criticize President Obama for his use of executive orders. He often cited that “you’re supposed to go through Congress and executive orders are not how it’s supposed to work” and so on. Now, I know that consistency is as alien to trump as empathy, fine food, and consensual sex but I do hope someone has the brass to ask him about it. Oh, and for the record, trump has surpassed President Obama in the number of EOs.

    https://twitter.com/i/status/1292600767350820864

  • muselet

    Of course this proposal came from Larry Kudlow. The man is a walking, talking bad-ideas factory.

    No wonder Donald Trump is fond of the notion: it makes a splendid distraction from his continued inept handling of the Covid-19 pandemic (163,000 dead Americans, and counting).

    –alopecia