Trump Reportedly Mulls Bypassing Congress to Pass Tax Break for Ultra-Wealthy
President Donald Trump’s administration is reportedly developing a plan to pass a tax break that will both largely benefit rich people and bypass Congressional approval to pass the tax break.
Sources told Bloomberg News that the plan would index capital gains to inflation and would be advanced quickly so that it could take effect before Trump campaigns for re-election in 2020. The White House didn’t immediately respond to a request for comment.
Most of the benefits of the plan would go to high-income households, with the top 1% receiving 86% of the benefit. According to an economic model, the plan would also reduce tax revenue by over $100 billion over the next decade.
Trump previously said in an interview with Bloomberg News that he was considering it. Trump could institute the change via executive order, but he would face a likely legal challenge.
People who invest in Roth IRAs or 401(k) retirement accounts wouldn’t benefit from the indexing because the accounts are taxed differently than capital gains, so a number of middle-class Americans would be unlikely to see any benefits from the plan.
[Image via Nicholas Kamm/AFP/Getty Images]
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