President Trump Weighs Lowering Capital Gains Taxes
You're invited to travel the world and discover what it means to live. The intercontinental life with more than two hundred properties worldwide intercontinental hotels and resorts welcomes you to who iconic properties in global destinations including New York London and Shanghai discover more about the cities and the tails inspire with stories of the intercontinental continental life a collection of stories that will excite your curiosity and offer new perspectives on the world here more at intercontinental dot com forward slash life. Here's your money briefing. Jr whalen at the Wall Street Journal in New York. The federal liberal tax rate on capital gains is currently twenty three point five percent but that could be coming down under a plan being considered by president trump will check in with our Washington bureau for details in a moment I some money and market news. You should know there's a plan on the table in Washington that would keep social security solvent for at least seventy five years the so-called Social Security Twenty one hundred act being considered by House Democrats would also raise benefits and lower income taxes on those benefits now under under current law individuals with income of at least twenty five thousand dollars and married couples with incomes of thirty two thousand dollars must pay income taxes on a portion Russian of their benefits. The bill would raise those thresholds to fifty thousand and one hundred thousand dollars and a higher taxes involved as well the plan would immediately immediately began imposing the tax on wages above four hundred thousand dollars and increase the tax rate from six point two percent to seven point four percent over twenty five years but the plan is a long way from becoming reality with Republicans currently controlling both the Senate and the White House. You're invited to travel the world and discover what it means to live the intercontinental life with more than two hundred properties worldwide intercontinental hotels and resorts welcomes you to conic properties pretty in global destinations including New York London and Shanghai discover more about these cities and the tails inspire with stories of the intercontinental life gave a collection of stories that will excite your curiosity and offer new perspectives on the world here more at intercontinental dot com forward slash life an idea. That's been brewing inside the White House to lower capital gains taxes axes could take some steps forward this week and Wall Street Journal reporter. K Davidson is on the line with us from our Washington bureau so kate president trump's idea is is to tie capital gains taxes to inflation but he hasn't gotten full support from his economic team. How does he plan to push this plan forward well. That's a little bit unclear clear I think that it's sort of widely recognized that the plan is unlikely to gain any traction in Congress so what the administration is doing the President President and his economic advisors are I think looking at and exploring possible alternatives to the extent that this is part of a broader package to look tax cuts in tax cuts two point zero as they're sometimes referred to that sort of a post election proposal but there it is possible for are you know the administration to to take action unilaterally on their own so I think the meeting today is to explore you know how they might do that. So by unilateral you mean they could could actually just bypass Congress they could but they're sort of one big one big thing standing in their way and so we're kind of waiting to find out the extent to which this this topic is explored at the meeting and that is this opinion. It's nineteen ninety-two opinion from the Justice Department's Office of Legal Counsel the basically concludes that the Treasury Treasury Department lacks the authority to do just that to move on their own so we know that the Treasury is essentially you know they've acknowledged that that this opinion kind of prevents them from acting and we've heard that you know that there there could be in a one one course of action they could take his ask the Justice Department to review view the opinion and reconsider it so that might be happening but we also know that the Treasury Secretary Mnuchin is is really not all that keen on this on this policy policy idea so it's kind of waiting to see which side wins out on the argument for actually going ahead with this proposal Attorney General William Bar plays an interesting enroll here that's right. He was actually the Attorney General at the time that that earlier opinion was issued so a little bit unclear. You know what factor that could I play in in the likelihood of whether this decision gets revised the capital gains currently face a twenty three point eight percent federal tax rate and people might be encouraged urge to sell assets. If that rate actually comes down the there's an estimate from the Penn Wharton Budget Model that says that most of the benefits of going going thing you know would go to high income households for the sort of change then it would reduce taxes by about one hundred billion dollars over a decade so a pretty significant effect on government revenues. There is the reasoning behind the uneasiness or opposition to this idea just based on lower tax revenue. I think that's part of it but I. I think that there's also political considerations here to write. you know officials have been talking about wanting to do more of a middle class. Tax Cut that this is the only real you know concrete proposal that we've heard about and it's a proposal that would undoubtedly benefit higher earning households so. I'm a little bit at odds perhaps with their messaging suggest that the administration might WANNA WANNA put forward heading into an election year and you know we've been down this road before. President trump has indicated support for lowering capital the gains taxes and then he has sort of backed away right. He's he's sending mixed signals now. It was kind of interesting there was a tweet from from the president linking to in article and op Ed by Senator Ted Cruz and grover norquist the president of Americans for tax return urging the president to do this and and he he re tweeted tweeted it and said an idea liked by many question mark so that was a little bit confusing to observers like what is he is. The retreat and endorsement is essentially chilly the question that he that he put out there. It's an interesting balancing act for the politicians because you're coming into an election season in twenty twenty you have lowering taxes is on the table but like you said in this particular case this might just benefit the higher earners so it really depends upon the value of the message getting to the tax payers right. I think another sort of a complication with the messaging here is that we have heard about this proposal. We first heard about it earlier in the summer and it's been raised as a potentially an effort to combat the slowing economy. If there's a potential economic downturn this could be one perhaps of of many others fiscal stimulus US efforts and of course. That's not a message that the administration wants out there either. They've been repeatedly arguing that the economy is very strong so so if you're going into election cycle saying the economy is great and yet we need another big tax cut it might be a little bit hard to square that all right. That's the journals K Davidson. That's and joining us from our Washington Bureau Kate. Thanks for coming on the show. Thank you and that's your money briefing. Im J._R. whalen in New York for the Wall Street Journal.