President Trump is eyeing a new tax cut plan that will provide America’s richest citizens with another $100 billion in tax cuts. The President, likely realizing Congress will fight back against his plan, allegedly wants to bypass lawmakers altogether by using the Treasury Department alongside a crazy loophole.
From The New York Times:
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. […] Independent analyses suggest that more than 97 percent of the benefits of indexing capital gains for inflation would go to the top 10 percent of income earners in America.
If Trump convinces the Treasury Department to change the definition of a “cost” he will likely fight an uphill battle that will be tied up in the court system for at least several months, and possibly as voters head to the polls for the 2018 mid-term elections.
Capital gains taxes apply to money earned from stock, real estate and other business holdings that are ultimately sold. While the loophole would provide some assistance to small business owners and the middle class, a majority of Americans make their money through wages.
As it currently stands, capital gains taxes are already taxed at a lower rate than the highest possible tax rate on income tax.
If Trump’s plan is passed, America’s elite could benefit from another 12-digit cut in the amount of taxes they pay on their personal windfalls.
Taxpayers are already reeling from Trump’s initial tax cuts which largely benefits corporations and the rich. With no real benefits provided to the average American with his new tax cut plan, the President could soon find himself in more hot water.