July 31, 2018

The Trump administration of U.S. is contemplating to bypass Congress to provide a tax cut of $100 billion for the rich.

The Treasury secretary of America, Steven Mnuchin, made the statement in an interview of the G-20 summit meeting these days. He said that the Treasury Department was studying the possibility to use its regulatory powers to allow many investors to cut capital gains taxation. Some wealthy taxpayers may regulate the original value of their asset accounting for inflation as it is sold.

Currently, taxpayers pay capital gains tax according to the difference between the amount of money with which they buy the asset and that for which they sell the asset. However, the conservatives hope to pay the capital gains taxes only according to the difference between the cost of buying the asset added inflation and the amount for which they sell it.

Republicans regard this action as a way to stimulate the economy by increasing motives for investors to make new investments. This way, they can fulfill the tax cut promise made by Trump last year. But democrats think indexing capital gains will only increase the deficit and benefit the top wealthy based on a report from the Penn-Wharton Budget Model.