Posted on 08/11/2020 7:58:47 AM PDT by SeekAndFind
President Trump opened the door this week to a capital gains tax cut, saying he's "seriously" considering it as a way to help the U.S. economy recover from coronavirus-induced recession.
“We’re looking at also considering a capital gains tax cut, which would create a lot more jobs,” Trump said Monday during White House press briefing. “So we're looking very seriously at a capital gains tax cut and also at an income tax cut for middle-income families."
Trump cannot use executive authority to slash the 20% long-term capital gains rate without Congress, but he could try to bypass Congress and lower the tax by indexing gains to inflation.
A capital gain is the profit from the sale of stock or real estate; indexing capital gains would lower tax bills for investors who are selling by adjusting the original purchase price of the item in line with inflation, essentially making a portion of gains exempt from taxation.
For instance, if an individual purchased an asset for $100 in 2000 and sold that item 18 years later for $200, the nominal capital gain would be $100, according to the Tax Foundation. But inflation over that same time period would have increased the price level by 49%. Under an indexing proposal, the original selling price would increase to $149 — meaning the individual would only pay a tax on $51, instead of the full $100.
But indexing capital gains taxes would do very little to actually spur economic growth, according to the Tax Foundation. In fact, only the top 1% of taxpayers would see their after-tax income increase -- an increase of 0.83%.
A separate study by the Penn Wharton Budget Model found that the top 1% of households would receive 86% of the benefit. The policy could reduce tax revenue by $102 billion
(Excerpt) Read more at foxbusiness.com ...
Sounds like he’s rallying the GOPe ahead of the election. Good move.
The top 1% employ tens of thousands. And 102 billion is literally peanuts given we are giving away trillions to the unemployed. Bottom line, we need to OPEN the economy fully.
Wow! I could really use that this year! Hope it’s retro to the beginning of 2020
they also need to take into account carrying costs... at least my understanding of it is things like property taxes are not taken into account when calculating gains...
Not so sure about this claim. My mother owns a modest lake cabin that she paid $60,000 for 40 years ago. It's probably worth ~$400k now. She has thought of selling it, but doesn't like the idea of the capital gains hit - she'd rather pass away owning it and give us kids the stepped-up cost basis. If she could adjust her cost basis by adding inflation... that would be a game changer for her. Among other things, she'd purchase a $60k vehicle about which she has been hesitating.
Maybe this is just anecdotal and we need to rely on the experts to tell us how to think.
Nothing. It'll never make it through Congress, not in this term and not in the next.
Maybe the Republican senators could take a 10-15 % cut in pay until the virus is over. Donate the money to charity.
The top 1% employ tens of thousands. And 102 billion is literally peanuts given we are giving away trillions to the unemployed. Bottom line, we need to OPEN the economy fully.>> we need to really get all government out of the economy now. No hair license and gym license and all of that administrative state bs. restore right to contract and own property and no longer collect illegal wage taxes.
So what? They say this like it's a bad thing. We already punish successful people by plundering their assets to buy votes and then use the stealth tax of inflation to erode their savings. Don't they deserve relief as much as anyone else? (Apparently not)
What does a capital; gains cut mean to me?
Not just for me but everyone, it means good things.
Not in the top 1% but didn't get any of the "free money" the gov't sent out.
Should have been done a long time ago for all taxes.
How about getting rid of ALL income taxes and going to a consumption tax?
Better than that, how about letting you deduct more than the measly $3,000 of capital losses in a year? I have plenty of those.
I believe you can take a one-time capital gains exemption.
A capital gain is the profit from the sale of stock or real estate...
I think if Trump does win in 2020, we may see major moves to the most radical tax reform since the 16th Amendment was passed. The possibility of going to a flat tax akin to Steve Forbes’ 1996 proposal may not be far-fetched.
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