Happy Labor Day: Trump floats tax cut condemned as 'pure giveaway to wealthy'
With Labor Day less than 72 hours away, President Donald Trump on Friday floated the possibility of handing wealthy investors yet another tax cut—this time by executive fiat—as the wages of most American workers remain stagnant.
On Twitter, Trump promoted an op-ed by Sen. Ted Cruz (R-Texas) and anti-tax crusader Grover Norquist urging the president to index capital gains to inflation, a move analysts say would primarily benefit the richest Americans.
"An idea liked by many?" Trump tweeted, linking to Cruz and Norquist's article in Real Clear Markets.
The tweet comes just days after Trump told reporters he is worried about being viewed as "elitist" and seemed to suggest he was no longer considering bypassing Congress to index capital gains to inflation, a move analysts and lawmakers say would be illegal.
As the Washington Post reported Friday, citing an anonymous senior administration official, Trump is considering unilaterally indexing capital gains despite the concerns he has expressed in public.
According to the Post:
The White House is still considering a plan to bypass Congress to enact a tax cut on capital gains, according to a senior administration official, although President Trump appeared to rule the idea out last week and expressed concern it could be perceived as "elitist"...
The capital gains tax cut would let investors who are selling assets, like a stock or a home, use the inflation-adjusted value of their initial purchase when making the sale. The higher initial price would reduce the taxable income from their sale of the asset, reducing the amount they pay in taxes.
In an analysis last year, the Center on Budget and Policy Priorities estimated that 86 percent of the benefits of indexing capital gains to inflation would go to the top one percent.
"The move would be a pure giveaway to wealthy investors," tweeted Slate's Jordan Weissmann.
Judd Legum, author of the Popular Information newsletter, echoed Weissmann, saying, "Apart from just sending millionaires checks, it's hard to think of a tax cut more targeted to the ultra-rich."
"Trump's political strategy," Legum added, "is to bad mouth 'coastal elites' and then give the coastal elites all the money."