President Trump is not planning to take executive action to reduce capital gains taxes, the White House said Wednesday.
“President Trump was thoroughly briefed on the complex economic, legal and regulatory issues, and concluded that at this time he does not feel enough of the benefits will go to the middle class,” White House spokesman Judd Deere said.
{mosads}The White House’s comment comes after Trump met with his economic advisers to discuss the issue of whether to unilaterally index capital gains to inflation, therefore reducing the amount of investment gains subject to tax.
Trump had given mixed messages on the topic in recent weeks. At one point last month, he said he was thinking about indexing capital gains, but then the following day said that doing so would be perceived as “somewhat elitist.” Then the next week he retweeted tweets that supported indexing capital gains.
A number of GOP lawmakers and conservative groups have been pressing Trump to take executive action to index capital gains ahead of the 2020 presidential election, arguing that doing so would boost the economy and help people across the income spectrum. And they have argued that Trump has the authority to do so because the Supreme Court has ruled that the term “cost” is ambiguous.
But Democrats have argued that Trump doesn’t have the authority to bypass Congress and unilaterally index capital gains, citing a 1992 memo from the Department of Justice. They also argue that indexing capital gains would increase the deficit and would largely benefit the rich, pointing to an analysis from the Penn-Wharton Budget Model.