The Trump administration has been considering another tax cut that would primarily benefit the rich — and add about $100 billion to deficits over 10 years. The proposed change would reduce the taxes owed by investors when they sell stocks or other assets by adjusting the original cost of those assets for inflation, thereby reducing the reported profit.
The administration, urged on by 21 Republican senators and conservative anti-tax activists, is looking at bypassing Congress — where such a proposal has little chance of passing — and enacting the tax cut unilaterally, though it has held back so far reportedly out of concern that the move would be illegal. Top administration officials are divided over the idea, The New York Times reported last week. Some Republicans worry that pushing through a tax cut that benefits investors would invite renewed criticism that Trump’s tax policies have been giveaways to the rich.
The Los Angeles Times Editorial Board showed just how those attacks would go in a scathing editorial published Friday calling on the administration to reject what it calls yet another terrible Republican tax idea:
“In a sense, this is just another effort by the all-taxes-are-evil crowd to pay less for the services the federal government provides and shift the costs onto future generations. … Coming on the heels of a major GOP tax cut that’s spurring trillion-dollar deficits, the proposal is beyond fiscally irresponsible. It also represents the worst of trickle-down economics, given that the tax break would benefit the wealthy almost exclusively. According to the Tax Policy Center, households in the top 20% of U.S. earners, whose average incomes were $347,000, collected 90% of the taxable gains in 2018; more than half of the gains went to households in the top 0.1%, whose average incomes were $10.8 million. … In addition, the proposal would open an alarming new loophole for savvy (and wealthy) taxpayers to exploit.”