The Club for Growth on Monday urged its allies to step up their push to press President Trump to take executive action to reduce capital gains taxes.
The prominent conservative group issued a “strategy memo” on indexing capital gains to inflation after Trump recently retweeted a post from the group on the topic.
{mosads}”We need to join forces and create a new call to action through the membership of our organizations encouraging President Trump to finally make the decision to correct the unfair treatment of capital gains taxation,” Club for Growth President David McIntosh wrote in the memo.
The memo was sent to stakeholders such as other conservative groups, Capitol Hill staff and policy experts, as well as to the White House, according to Club for Growth spokesman Joe Kildea.
Trump in recent weeks has given mixed signals about whether he wants to act unilaterally to index capital gains to inflation — an action that would reduce the amount of investment gains subject to taxes.
On Aug. 20, Trump said he was thinking about indexing capital gains. However, the president said one day later that he was not looking at indexing, saying he thinks that doing so would be perceived as “somewhat elitist.” Then the following week, Trump retweeted posts from the Club for Growth and publishing executive Steve Forbes that linked to a Real Clear Markets op-ed from Americans for Tax Reform President Grover Norquist and Sen. Ted Cruz (R-Texas) in support of indexing.
Many conservative groups and GOP lawmakers want Trump to take executive action to index capital gains, and think that doing so could help boost the economy and the president’s reelection chances.
“This is an issue for 2020 because voters want to see strong economic growth and more money in their pockets,” McIntosh wrote. “If President Trump takes executive action to make the change in the near-term, the benefits to U.S. economy will be evident and he will receive the credit.”
McIntosh urged other groups to mobilize their memberships and educate members of the public about how they would benefit from capital gains being adjusted for inflation. He also encouraged supporters of indexing capital gains to talk about the issue in interviews on CNBC, Bloomberg and Fox Business Network in an effort to target Trump and investors.
Democrats strongly oppose Trump acting on his own to index capital gains to inflation. They argue that Trump doesn’t have the authority to make this change by executive action, pointing to a 1992 Justice Department memo. They have also cite an estimate from the Penn-Wharton Budget Model finding that most of the benefits of indexing capital gains would go to those in the top 1 percent of income.
But the Club for Growth argued that Trump has the authority to index capital gains because “there is legal precedent for the term ‘cost’ to include inflation.” The group also argued that many people would benefit from indexing capital gains, not just the rich.
“If the calculation of capital gains taxes includes an inflation adjustment, there will be a robust benefit to millions of Americans that own land, a home, a 401(k), stocks, bonds, and those enrolled in the Federal Employees Retirement System (FERS),” McIntosh wrote. “The benefit of this policy change will extend to most Americans, not just millionaires and billionaires as the Socialist Left would lead you to believe.”