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.
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