President Donald Trump wants to change a Treasury Department rule that will effectively index capital-gains taxes to inflation. This would result in a $100 billion tax cut over the next decade, and Trump could enact it without having to deal with Congress.
The Treasury Department would accomplish this goal by changing the meaning of the word “cost” in the Revenue Act of 1918. Conservative tax watchdogs such as the Americans for Tax Reform (ATR) feel that this term has been misinterpreted for far too long, and that has caused Americans to be fleeced for many decades by a greedy and profligate federal government.
“Federal law is sufficiently ambiguous to allow Treasury to index capital gains taxes to inflation,” said Alexander Hendrie, who works as ATR’s Director of Tax Policy, citing several studies to back up his assertion. “In addition, there is significant judicial precedent for indexation and no explicit Congressional opposition to indexation.”
Despite these independent analyses showing that the rule can be changed, swamp rats from the Justice Department remain adament that this rule cannot be changed and the tax must continue to be collected.
“The Department of the Treasury does not have legal authority to index capital gains for inflation by means of regulation,” Assistant Attorney General Timothy Flanigan said in a report from the Justice Department.
But Trump has never been one to take the words of entrenched federal bureaucrats as canon. He may want to provide the economic relief to Americans and then dare the courts to stand in his way.
“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,” National Economic Council Director Larry Kudlow said to the New York Times.
Because the tax cuts would primarily go to the most wealthy and productive of US citizens, prominent Democrats are already crying foul – solidifying their position as the party of tax hikers.
.@realDonaldTrump wants to go around Congress & hand $100 billion to his rich buddies on top of $1.5 trillion he gave away to billionaires & big corporations last year. DC works great if you’re rich & powerful. How about a gov't that works for everyone? https://t.co/Go0He6UoKl
— Elizabeth Warren (@SenWarren) July 30, 2018
Not content with a budget busting tax break that has helped the wealthy and CEOs, the Trump admin is considering another $100 billion gift.
Remember this when they say we have to cut Medicare or Medicaid to save money.https://t.co/3r04O8sCE5
— Adam Schiff (@RepAdamSchiff) July 31, 2018
Apparently the first tax cuts weren’t enough for the GOP’s wealthy donors and corporations — now they’re proposing bypassing Congress to give the rich a $100 billion tax cut, instead of focusing on improving the lives of middle-class families. https://t.co/3anzNB9Ymz
— Kamala Harris (@KamalaHarris) July 31, 2018
Democrats would not be wise to posture themselves as the party of higher taxes as well as open borders heading into the 2018 mid-term elections. Trump’s 4D chess game may be paying off as Democrats become obsessed with opposing him tooth and nail to the detriment of their own political gains.