Friday, March 29, 2024

How Trump Can Deliver MASSIVE Tax Cuts Without Congress

A recent report in The Daily Signal  suggests the Trump administration is considering a major, pro-growth tax cut that won’t require the approval of Nancy Pelosi: Indexing capital gains to inflation.

This tax cut would be a huge boon to our economy because currently, when individuals invest in stocks (in a non-tax exempt vehicle) or purchase real estate, they are subject to capital gains taxes on fake gains. This is because the IRS does not account for any devaluation of the dollar (inflation) when calculating ones net-profit on an investment. When compounded over decades, these artificial gains can add up to a massively higher tax bill when you go to sell your house or stocks. 

Since there is little hope for Congress to pass economically beneficial legislation while Nancy Pelosi controls the House, indexing capital gains to inflation is likely the single-most pro-growth policy that could be enacted this year. Why? Because President Trump can enact it with the stroke of a pen – all he needs to do is issue an executive order directing the Treasury to re-define “cost” as it pertains to capital gains taxation to include an inflation adjustment. While Democrats and their media allies will inevitably protest President Trump’s tax-cuts-by-pen, back in 1992, Democrats including Chuck Schumer, Bernie Sanders, and Maxine Waters ALL supported indexing capital gains to inflation. Chuck Schumer event went as far as to say:

“If we really want to increase growth, there are proposals that we can do. I would be for indexing all capital gains and savings and borrowing.”

Additionally, if the administration wants to expand its pro-growth reforms one step further, there is a second Treasury rule change that would deliver even more tax cuts – eliminating capital gains taxes on U.S.-minted gold coins.

Under our current system, Americans face punitive capital gains taxes if they own gold. This is because instead of treating gold as money (as specified by the Constitution), we classify it as property. This policy puts America at an enormous economic disadvantage compared to the rest of the world because our gold holdings are subject to capital gains taxation, as well as sales tax in many states. For middle class families, these taxes amount to a major disincentive for those who wish to own gold as a hedge against inflation and protect their savings.  

While other countries such Russia and China are accumulating gold en masse — together these two countries are importing an estimated 500 tons per year —our tax treatment of gold puts ‘America Last’.

Indexing capital gains to inflation and zeroing out capital gains taxes on gold coins would make America’s economy more globally competitive and create new incentives for saving and investment.  President Trump, bring on the executive tax cuts!

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