Just days after issuing executive orders to defer payroll taxes, suspend student loan payments and assist renters and homeowners, President Donald Trump said Monday that he was “looking very seriously” at a capital gains tax cut, as well as further income tax cuts for middle-income families.
“We’re looking at also considering a capital gains tax cut, which would create a lot more jobs,” Trump said during a Monday press briefing, telling reporters to expect more details in the “upcoming few weeks.”
Trump did not say how he planned to reduce capital gains taxes. The president cannot change the tax rate itself without an act of Congress. But he could order the Treasury to index capital gains rates to inflation, a move the White House floated last summer.
At the time, 21 Republican senators sent a letter to the Treasury supporting the idea, while Democrats argued that making the change would be illegal and would overwhelmingly benefit wealthy taxpayers.
Such an order would likely be challenged in court.
Even if Trump has the authority to make such a change, implementing it would be “exceedingly complex” for investors, according to Andy Friedman, founder and principal of The Washington Update, a former tax lawyer.
“Taxpayers will have to figure out how to recompute their basis in every asset every year until they sell,” Friedman said in an email. “Undertaking that computation will be even more arduous for non-market assets (real estate, partnership interests, etc).”
The orders issued by Trump on Saturday defer payroll taxes for employees earning $100,000 or less annually, suspend student loan payments through the end of 2020, and instruct his Cabinet to find ways to assist renters and homeowners with lease and mortgage payments.
White House counselor Kellyanne Conway said during a Tuesday morning press briefing that Trump issued the orders because of the lack of a deal on a new stimulus plan. “We never left the negotiation table; we’re always there,” she said.
Meanwhile, the deadline to apply for a Paycheck Protection Program loan was Saturday. The original deadline was June 30.