Trump should delete the Federal Reserve and Chamber of Commerce...
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.
The Bush White House reportedly dropped its capital gains plan amid disagreement among senior officials over whether it was legal.
The change has been a longtime goal of Trump’s top economic adviser, Larry Kudlow, who has said the policy would spur job creation and economic growth because people wouldn’t be taxed on what he’s called “phantom income.”
“It would be a giant economic stimulus for the economy,” said Stephen Moore, a former Trump campaign adviser and a contributor to FreedomWorks, a Washington-based conservative advocacy group. “It would help the stock market and it could unleash hundreds of billions of dollars of new capital for investment.”
The inflation adjustment would amount to a several percentage point tax cut for investors, depending on the type of asset and how long it’s held, according to 2018 estimates from the non-partisan Congressional Research Service.
Corporate stock with dividends held for 10 years would be currently be subject to an effective tax rate of 24.3%. That same holding indexed to inflation would be subject to a 21.4% tax rate, CRS said.