Donald Trump hinted on Friday that he is considering a move to limit the taxes that Americans pay when selling shares, land, small businesses and other assets – despite the fact that he said a week ago that it was somewhat elitist is experienced. & # 39;
The president has retweeted the effort of editor-in-chief Steve Forbes to spread an op-ed whose authors included Texas Republican senator Senator Ted Cruz, who called for a change in the IRS rules that would index capital gains to inflation & # 39 ;.
Capital gains are profits made by selling real estate for more than it originally cost. The first $ 250,000 profit on the sale of a home is exempt. Most Americans pay 15 or 20 percent.
Indexing means that inflation is taken into account by recalculating the original purchase price of an asset when someone sells it. This results in less profit and a lower tax burden.
& # 39; An idea that many like? & # 39; Trump asked in his tweet.
He has swung the matter like a sling in recent weeks and seems to be testing the waters and probing possible reactions from voters and investors.
A White House official on Friday called the back and forth & # 39; test balloons & # 39 ;.
President Trump mocked a week ago with the idea to index & # 39; capital gains & # 39; to inflation, but on Friday retold large supporters; & # 39; indexing & # 39; is the IRS that recalculates the original purchase price of an asset when it is sold, taking into account inflation; that results in a smaller profit and taxes
The president gave Friday support for the indexing maneuver, retweeted his supporters and left a question mark as a scourge for the markets
The president told reporters on August 20 that & # 39; many people like indexing, and it can be done very easily. It can be done directly by me. And so we looked at it. & # 39;
He surprised the press corps a day later with a U-turn and said: & # 39; I have no intention of indexing. & # 39;
& # 39; I have studied indexing for a long time. I think that if I do it, it will be seen as somewhat elitist. I don't want to do that, & he said.
& # 39; I think indexing is really better for the higher income groups. I am not going to do that, & Trump added. & # 39; But if I wanted to do it, I believe I could. & # 39;
The president has also retweeted a link to Cruz & # 39; s Friday from Club For Growth, a free-market group with which the president has collaborated in the past.
& # 39; We're not tired of winning this, & # 39; tweeted the group. @realdonaldtrump should boost our already winning economy by indexing capital gains to inflation. & # 39;
Cruz, a former Trump rival who once embarrassed candidate Trump as & # 39; Lyin & # 39; Ted, tried to persuade Treasury Secretary Steve Mnuchin to turn a regulatory switch and change the income tax calculation on capital gains. He has not been successful so far.
Cruz has put finance minister Steven Mnuchin under pressure – so far unsuccessful – to lower investors' taxes by indexing capital gains, arguing that the move would encourage savings and investments.
His op-ed, co-authorized by old anti-tax crusader Grover Norquist, speaks out against the & # 39; inflation tax & # 39; and claims that consumers are routinely & # 39; taxed on illusory income due to price increases throughout the economy & # 39 ;.
Sen. Ted Cruz puts pressure on Finance Minister Steven Mnuchin – so far unsuccessful – to lower investors' taxes by indexing capital gains
The pair estimates that the 54 percent of Americans who own shares would immediately benefit from any changes. & # 39; [I] t also benefits the 55 million Americans who own a 401k & # 39 ;, writes the writer.
In a separate Washington Post On Tuesday, Norquist drew up two scenarios to illustrate what a regulatory change could do.
& # 39; If you bought a share of IBM shares in 1970 for $ 14.81 and sold it today for $ 134.42, you would pay $ 28.47 in capital gains tax, & # 39; he wrote. & # 39; Eliminating inflation during that period reduces your tax bill by 70 percent. & # 39;
& # 39; The agricultural land in Texas averaged $ 722 per hectare in 1986. In 2019, that country was worth $ 2,815 nominal, for a capital gain tax of $ 482 due. Remove inflation and the tax drops to $ 247 per hectare – a 50 percent reduction, & Nor39ist continued.
According to IRS data, more than 24 million US households reported capital gains on their 2016 income tax return. The majority were taxpayers with a gross income of less than $ 100,000.
In June, the US Supreme Court confirmed that courts must comply with federal agencies when they re-interpret their own rules, within reasonable limits.
The case was Kisor v. Wilkie, closed with a 5-4 margin.
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