White House mulls capital gains tax break to benefit wealthy

The White House is developing a plan to cut taxes by indexing capital gains to inflation, according to people familiar with the matter, in a move that would largely benefit the wealthy and may be done in a way that bypasses Congress.

Consensus is growing among White House officials to advance the proposal soon, the people said, to ensure the benefit takes effect before President Donald Trump faces re-election in 2020.

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.

A White House spokesman didn’t immediately respond to a request for comment.

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.

Wealthiest Benefit

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.

https://www.msn.com/en-us/money/markets/white-house-mulls-capital-gains-tax-break-to-benefit-wealthy/ar-AADw1wD?li=BBnbfcN