The Trump administration is proposing a huge tax cut for the rich that bypasses Congress
The Treasury Department is considering changing the definition of "cost" in determining how the IRS calculates capital gains, or investment income, effectively handing a $100 billion tax cut to the wealthiest Americans without approval from Congress. Treasury Secretary Steven Mnuchin told The New York Times he's considering allowing capital gains to be adjusted for inflation, and "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."
Conservatives have long pushed for indexing capital gains to inflation, and White House National Economic Council director Larry Kudlow is a longtime proponent. But efforts to enact it in Congress have faltered, in part because more than 97 percent of the benefits would go to the top 10 percent of income earners and two-thirds would go to the top 0.1 percent, according to independent analyses. The George H.W. Bush administration considered and rejected making the change by regulatory fiat in 1992, judging that such a move wouldn't survive court challenge.
The Times explains how indexing capital gains to inflation would work:
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Indexing capital gains to inflation would lower federal tax revenue by $102 billion over a decade, according to a Wharton School of Business analysis, and the Congressional Research Service said in July that any economic stimulus from the change would be canceled out by additional federal debt, already growing rapidly due to the GOP's recent $1.5 trillion tax cut.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.
-
'Voters know Biden and Trump all too well'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
Is the Gaza war tearing US university campuses apart?
Today's Big Question Protests at Columbia University, other institutions, pit free speech against student safety
By Joel Mathis, The Week US Published
-
DOJ settles with Nassar victims for $138M
Speed Read The settlement includes 139 sexual abuse victims of the former USA Gymnastics doctor
By Justin Klawans, The Week US Published
-
Empty-nest boomers aren't selling their big homes
Speed Read Most Americans 60 and older do not intend to move, according to a recent survey
By Peter Weber, The Week US Published
-
Brazil accuses Musk of 'disinformation campaign'
Speed Read A Brazilian Supreme Court judge has opened an inquiry into Elon Musk and X
By Rafi Schwartz, The Week US Published
-
Disney board fends off Peltz infiltration bid
Speed Read Disney CEO Bob Iger has defeated activist investor Nelson Peltz in a contentious proxy battle
By Rafi Schwartz, The Week US Published
-
Disney and DeSantis reach detente
Speed Read The Florida governor and Disney settle a yearslong litigation over control of the tourism district
By Peter Weber, The Week US Published
-
Visa and Mastercard agree to lower swipe fees
Speed Read The companies will cap the fees they charge businesses when customers use their credit cards
By Peter Weber, The Week US Published
-
Reddit IPO values social media site at $6.4 billion
Speed Read The company makes its public debut on the New York Stock Exchange
By Peter Weber, The Week US Published
-
Housing costs: the root of US economic malaise?
speed read Many voters are troubled by the housing affordability crisis
By Peter Weber, The Week US Published
-
Feds cap credit card late fees at $8
speed read The Consumer Financial Protection Bureau finalized a rule to save households an estimated $10 billion a year
By Peter Weber, The Week US Published