Trump says he’s not planning ‘elitist’ capital gains tax break
President Donald Trump said Wednesday that he’s not looking to cut taxes by indexing capital gains and that doing so would be perceived as “somewhat elitist” as it would benefit the wealthy.
“I’ve studied indexing for a long time,” Trump told reporters at the White House. “I think it will be perceived if I do it as somewhat elitist. I don’t want to do that.”
“I’m not looking at doing indexing. And I haven’t been seriously looking at it,” Trump said. He added: “It’s not something I love.”
Trump made the comments to reporters at the White House a day after saying he could allow indexing of capital gains without congressional approval. He said Wednesday he’d need a letter from the attorney general saying he could do it.
Indexing capital gains would slash tax bills for investors when selling assets such as stock or real estate by adjusting the original purchase price so no tax is paid on appreciation tied to inflation.
Bloomberg News previously reported that White House officials were pursuing a plan for indexing.
Revamping capital gains taxes through a rule or executive order likely would face legal challenges, a concern that reportedly prompted former President George H.W. Bush’s administration to drop a similar plan. White House officials had previously indicated they had hoped to advance a plan on capital gains taxes as soon as this summer.
Indexing capital gains taxes would do very little to spur economic growth, according to the Tax Foundation. The group says the tax cut for investors would increase the size of the economy by 0.11% in the long run.
Most of the benefits would go to high-income households, with the top 1% receiving 86% of the benefit, according to estimates in 2018 by the Penn Wharton Budget Model. The policy could reduce tax revenue by $102 billion over a decade, the model found.
Trump seemed to acknowledge that on Wednesday. “I think it’s probably better for the high-income people and I’m not looking to do that,” Trump said.
Trump has previously said he is looking at cutting payroll taxes, a move that could quickly lower levies on working Americans. However, Trump has also said that a payroll cut isn’t needed right now because the economy is strong.
Trump’s comments came as the U.S. economy has shown warning signs that could presage a recession, although economists surveyed by Bloomberg News say there’s only a 35% chance of it hitting within the next year.
With assistance from Saleha Mohsin.