Trump mulls $100 billion tax cut for the rich
Over a hundred protesters met at Greeley Square in Midtown Manhattan on November 27, 2017. Photo: Erik McGregor/Pacific Press/LightRocket via Getty Images
"The Trump administration is considering bypassing Congress to grant a $100 billion tax cut mainly to the wealthy, a legally tenuous maneuver that would cut capital gains taxation and fulfill a long-held ambition of many investors and conservatives," the N.Y. Times' Alan Rappeport and Jim Tankersley report.
The big picture: "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."
- An example: "If a high earner spent $100,000 on stock in 1980, then sold it for $1 million today, she would owe taxes on $900,000. But if her original purchase price was adjusted for inflation, it would be about $300,000, reducing her taxable 'gain' to $700,000. That would save the investor $40,000."
Why it matters, from WashPost's Damian Paletta: "[T]he use of executive power on such a significant change to the tax law would be highly unusual and could be vulnerable to a legal challenge."
- "Senior administration officials have discussed whether to proceed but have not concluded they have legal authority to do so."
- "The move was rejected during the George H.W. Bush administration because it was seen as outside the scope of Treasury’s authority and only attainable via an act of Congress."