Senate Democrats are warning Treasury Secretary Steven Mnuchin against bypassing Congress to index capital gains rates to inflation, a move the 42 lawmakers argue is “an illegal action that would defy longstanding Justice Department policy.”
In their Wednesday letter, the senators state that “indexing capital gains would double down on the 2017 $1.5 trillion tax giveaway with at least another $100 billion tax cut. According to the Penn-Wharton Budget Model, more than 86% of the benefit of indexing capital gains would go to the top 1% of taxpayers, while just 2.5% of the benefit would go to the bottom 90% of Americans.”
The Democratic senators’ request follows a July 29 letter signed by 21 Republican senators urging Mnuchin to circumvent Congress and index capital gains rates to inflation.
President Donald Trump said in late July that the White House is developing a plan to do so. The change could be made through a rulemaking or executive order, but such a move would likely be challenged in court.