White House press secretary Sarah Sanders said Wednesday that President Trump has asked the Treasury Department to examine reducing capital gains taxes — a move that would largely benefit higher-income taxpayers.
“No administration policy has been determined, but the president has asked the Treasury Department to take a look into it,” Sanders said at a press briefing.
Sanders also said that the capital gains cut is “something that has a lot of support from various people.”
{mosads}A number of leading conservatives, such as Americans for Tax Reform President Grover Norquist, have been pushing Treasury to take executive action to index capital gains to inflation, which would reduce the amount of money subject to capital gains taxes when taxpayers sell investments.
The capital gains issue has gotten new attention this week, after The New York Times reported that Treasury Secretary Steven Mnuchin is weighing action if Congress doesn’t act legislatively.
A number of GOP lawmakers support Mnuchin issuing regulations to reduce capital gains taxes, with bills offered on the topic in the House and Senate. Conservatives argue that the tax cut would boost the economy and expand upon the tax-cut law Trump signed last year.
But Democrats oppose the idea, arguing that the tax cut would be a boon to wealthy people and add to the debt. They also argue that Treasury doesn’t have the authority to index capital gains taxes through regulation.
Their opposition and the narrow GOP majority in the Senate make passage of any bills on the subject unlikely.
The Penn-Wharton Budget Model estimates that indexing capital gains would lower federal revenue by about $100 billion over a decade.