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Treasury Weighs $100 Billion Cut In Taxes for Rich

By The New York Times

WASHINGTON — 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 conservativesRead full story

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  • It does make sense to adjust capital gains for inflation, but of all the illogical things in the tax code to make a priority of fixing, this one is transparently about rewarding donors and giving the economy a short-term stimulus.

  • Jing Cao
    Jing CaoQuartz

    Fact: between 2015 and 2016, Trump promised multiple times on the campaign trail he would eliminate the carried interest loophole, aka tax carried interest like normal income instead of capital gains. Look it up, there are multiple videos of this. He failed to do so for the first big tax cut — this disproportionately/mostly benefited rich Wall Street types.

    Fact: only 54% of Americans invest in the market at all (through individual stocks, mutual funds, pensions or retirement plans), according

    Fact: between 2015 and 2016, Trump promised multiple times on the campaign trail he would eliminate the carried interest loophole, aka tax carried interest like normal income instead of capital gains. Look it up, there are multiple videos of this. He failed to do so for the first big tax cut — this disproportionately/mostly benefited rich Wall Street types.

    Fact: only 54% of Americans invest in the market at all (through individual stocks, mutual funds, pensions or retirement plans), according to Gallup. In 2016, taxpayers with more than $1 million in income were also the recipients of 75% of the benefit from capital gains taxes (which are lower than regular income).

    Fact: the real median household income (aka the middle class) in 2016 was just under $60,000 — Census data. This is the number that best represents a “normal” American’s income.

    Therefore, a break on capital gains tax will largely benefit only the upper echelon of the country. Those are the same people who are major donors to, yes both, the Republican and the Democratic parties. Those are also people including Steve Mnuchin and Donald Trump. (Though, as other readers have pointed out, it’s not even a big boon for those people. What’s $40,000 to a multimillionaire?)

    The people who don’t benefit? Most Americans who are working hard to take care of their families, who live paycheck to paycheck — or even those with some money saved up, maybe investing a little in the market, who pay a couple hundred, say, in capital gains taxes a year. Those people stand to save a few dollars, at best.

    Trump broke and will keep breaking a campaign promise to his largest base of supporters (that was in fact one of the few things he and Clinton agreed on) in order to help his friends in Washington and the “coastal elites” he loved railing on. So uh, what was that about draining the swamp?

  • Peter Repucci
    Peter RepucciAssociate at Riverstone Holdings

    Like some of the other commenters have noted, this makes all the sense in the world. In a vacuum. But in context.... why? This has a tremendously negative effect on tax revenue and you have to be kidding yourself if you think that the added investment incentives will come even close to triggering sufficient incremental economic growth to make up for the loss. The self-funding tax cut argument can be compelling when applied to corporate tax reductions, but a tax cut just for investors? The benefits

    Like some of the other commenters have noted, this makes all the sense in the world. In a vacuum. But in context.... why? This has a tremendously negative effect on tax revenue and you have to be kidding yourself if you think that the added investment incentives will come even close to triggering sufficient incremental economic growth to make up for the loss. The self-funding tax cut argument can be compelling when applied to corporate tax reductions, but a tax cut just for investors? The benefits don't even come close to making up for the costs.

    Investors don't need help. Hedge funds, private equity, etc are essential in providing a capital solution for otherwise inefficient markets. In return, they are rewarded handsomely. Tossing a few incremental dollars has such diminishing returns at this point that it's laughable to see a former Goldman / hedge fund guy like Mnuchin stumbling over himself to gaslight America into buying him and his buddies an extra yacht or two.

  • Max Lockie
    Max LockiePlatform Editor at Quartz

    I didn't even know that a reduction in capital gains taxes was on the table. For years the only thing I've been reading about is treating capital gains like income.

  • Hey, they may be onto something here. what else can we index to inflation? Mortgage bills? Social Security checks?

  • We need the #onepercent to re-invest in the country that they’re making their profits in. The glue of our economy may very well be our taxation system- after all, inflation is an issue, no?

  • Kyo Kaku
    Kyo KakuVice President at China-Japan J/V

    While the administration helps the rich becomes richer by this tax cut for capital gain, it suffocates the general consumers with additional tariffs, or increased taxes , on imports from the countries against Trump’s arbitrary trade policy.

  • Anthony Duignan-Cabrera
    Anthony Duignan-CabreraCEO at ADC Strategy

    Like the mythical"trickle down economics" of past Republican administrations, a tax cut for the wealthy will do little for the majority of Americans, like those previous tax cuts where all big business did was buy back shares (while salaries remained stagnant), Trump is fleecing his supporters while pandering to their basest fears and prejudices. They have it coming.

  • The budget deficit is projected to spiral way out of control after last years tax cuts. This would only exacerbate a scary situation.

  • Mike Moore
    Mike Moore

    Federal revenue is at record levels since the tax cuts. Isn’t the goal to raise revenue? Do most of you realize that this will increase the turnover of investments which would further increase tax revenue.

  • Chris McCoy
    Chris McCoy

    This is why the next generation is looking at socialism

  • Who the hell is going to pay the price of decent government? NO ONE!

  • De’Andre Crenshaw
    De’Andre CrenshawRetail Managment at CVS Pharmacy

    We are bankrupting the economy and increasing income inequality with another set of bad policy objectives. The loss in revenue will have to be offset with cuts in government services or taxes elsewhere which isn’t something we need. Plus the economy is strong this is going to overstimulate a roaring economy. This is bad policy.

  • Casey Tithof McIvor
    Casey Tithof McIvor

    I think the saying is:

    Come and get it, while the fryin' pan is hot.

    100 billion dollars... Corruption at it's finest. 🇺🇸

  • Think about how inflation would be weaponized once capital gains are protected.

  • Mark Daume
    Mark Daume

    Whatever. I just don’t care what they do, anymore.

  • Lisa C
    Lisa CMedical Assistant

    This is expected but so infuriating. Makes ya feel hopeless.

  • Ethan Dickenson
    Ethan Dickenson

    How can we cut taxes for the rich? Most of them don’t pay anything today? Does that mean the IRS is going to have to ‘pay out’ to the wealthiest people in our society? They probably need the money to hire a group of lawyers and PR firms so they can fund their tax evasion litigation. America is truly the ‘land of opportunity’ for the morally weak. Look at Manafort..., even if they get caught they get off. If trickle down worked, we would still have Kings. It would be so much easier and more fair to

    How can we cut taxes for the rich? Most of them don’t pay anything today? Does that mean the IRS is going to have to ‘pay out’ to the wealthiest people in our society? They probably need the money to hire a group of lawyers and PR firms so they can fund their tax evasion litigation. America is truly the ‘land of opportunity’ for the morally weak. Look at Manafort..., even if they get caught they get off. If trickle down worked, we would still have Kings. It would be so much easier and more fair to incorporate some kind of flat tax..., but it will never happen because people like Manafort make and break the rules with impunity. I would like to assure the wealthy, the public is watching...

  • Jane Davison
    Jane Davison

    The wealthy have to pay their dues like the rest of us

  • billy jones
    billy jones

    Good idea. Especially for the long term investors. It would work with inflation numbers. Imho the tax cut advantage would benefit more with the age of the investor. A young buck would probably buy more stock. Keep in mind of the baby boomers. It’s about that time. Isn’t it? After all we want more exports to balance out more. ???

  • John  Lennon
    John Lennon

    Capital gains should be wiped out period. It’s essentially double taxation.

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