This country is suffering from malignant greed. At present it seems a cure for cancer is more likely than a cure for a greed that has metastasized into every branch of federal government. We can cut out the obvious Republican tumors in the next elections, but the cure will require radical changes that the current Democrat party will not be willing to make. The prognosis for our survival is not good.
3
Mnuchin's mantra is "The rich get richer and the poor get poorer." Isn't that the American way?
3
They really don't care about the elections except to get this done before the elections. They want to and can do it now before they lose control. That's all. They will be wealthier and that is all that matters.
4
Cutting taxes, one way or another, is all Republicans know how to do. Even a fifth grader in a failing school could do that.
2
This proposal makes sense. Not to the redistributionist fellow travelers on the Times editorial board, of course, but to anyone who ever paid capital gains tax.
Since tax cuts have the most impact on those who actually pay taxes - those wicked, greedy rich people - The Times' opposition is not surprising.
Hope they try this and the Dems can hang it around their necks going into the mid-terms.
But they'd better get someone else besides the Senator From Wall Street, Chuck Schumer, to lead the opposition. He has zero credibility and every word that comes out of his mouth in that whining tone of voice just turns people off. They've got to find others to represent the party besides Chuck and Nancy, two entrenched coastal elites. People are sick of them. We need to hear more from people like Montana Senator Jon Tester who, as a working rancher, has much more credibility with the voters the Dems are going to need this fall.
2
Don't any of you commenting understand that capital gains tax hits seniors the most? Those that rely on investments to help them live out their lives? These are working class (esp. union members), middle class, and most of the country! Why would you punish savers from trying to survive by letting the government take what it didn't risk (and ignore losses)?! The solution is to stop the day traders and investment managers that use investing as their source of income vs. working at a company or business. This can easily be done by taxing all investment holdings (house, stock, bonds, etc.) at the earned income rate UNLESS held for more than a year. The board is just trying to divide it's readers, again. Fake news propaganda!
2
In the "Old West", at least the robbers wore masks. Today, just a bunch of lies and the serfs bow to the dictator. Cleaning house has a new meaning; stealing all the available money from the 90% and giving most of it to the 1%.
New art of the deal formula:
L + (LT) (1%) = N$ (99%) - MMSS = chaos
Resulting in a major depression.
Note: "L" is looting the treasury, "LT" is less taxes for the 1%, "N$" is no money for the 99%, with Medicare, Medicaid and Social Security severely reduced.
1
Czars being dragged into the woods and shot, French kings and queens heads rolling via the guillotine. Perhaps in this day and age, and in this country, the arrogant rich feel protected by their base, but their hubris is an illusion. The political ax, if not a real one, will surely fall sooner rather than later.
4
In numerous articles and essays, you continue to fail to mention the fact that Mr. Mnuchin got his money out of the Madoff Ponzi scheme in the last week before the great collapse. Insider collusion? Not prosecuted...white collar criminals rarely are. You expect ethics out of this supreme swamp creature? You wonder why these kleptocrats are cynical? Get real.
5
So when the rich get all these hundred billions more and the US faces a catastrophe from wildfires or hurricanes or tornadoes or floods or sea level rise or unbelievable heat or any of the tragedies waiting because of global warming, or from a North Korean missile, will Trump turn his back and say " sorry we can't afford to help, you will just have to stop being lazy and take care of yourselves" like he did with the Puerto Ricans?
6
Okay. Let's say an investor, any investor, buys a widget for $100 with his after tax dollars. Ten years later he sells the widget for $200, but inflation has reduced the buying power of that $200 to what $100 would have bought ten years prior. No real gain, correct? Then, the investor must pay, let's say, 30% of this $100 "false gain" in capital gains taxes. So, the end result is that he is paying $30 in taxes even though he made no real profit, and he is now $30 in the hole. Now, explain to me, O Liberal economics brain trust of NYT commenters, just how this is fair? Oh wait, I think know, because it sticks it to "the rich," right?
A nation gets the government it deserves and the United States we knew is dead.
3
"Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all."
~ John Maynard Keynes
"We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both.”
~ Justice Louis D. Brandeis
"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning.”
~ Warren Buffett
9
Crony capitalism always was bone headed. But hey, Putin seems to make it work (of course with the entire state apparatus behind him and political, economic, and cultural suppression for anyone who disagrees). I tend to think that the penny-ante dictators who tend to migrate there (Ferdinand Marcos comes to mind) just beggar their country for the future. Anyway, Wilber Ross and the Mnuchin aren't known for their political smarts, thus that they come up with something like this at the midterms. The billionaire tax bill isn't popular and you come up with an even worse idea; executive action for a sliver of rich people you just gave a tax cut to...what a joke.
This proposal tax cut is part of the larger issue of who wins and who loses. Throughout American history the rulers have favored the rich.
Since Hamilton argued the federal debt is a blessing for it binds the rich to the rulers, we can find many cases of government favoring the rich. For example, draftees during the Civil War could pay someone else to take their place. During the Vietnam Holocaust, the rich could get exemptions through college deferments, connections to get in the national guard, or bone spurs, while many poor died.
The Founders avoided the word "slavery" in their Constitution; but, slavery enriched the rich at horrendous harm to the poor and powerless blacks. G. Washington, T. Jefferson, J. Madison, B. Franklin and other vile disgusting morally repugnant slave owning white supremacists -- not Trump's white supremacy -- didn't get the death penalty, and the victims deprived of full restitution.
When G.M. killed dozens by hiding defects, none of the adult owners of G.M. received the death penalty.
This proposed Trump tax cut which inflamed the Editorial Board is minor in comparison.
Does the Editorial Board know how to create a government without bias for the rich, the political equivalent of squaring a circle? They might show us by creating such a government.
As long as the Editorial Board would have us believe that the American government is legitimate, why should we take their criticisms of its inherent bias seriously?
4
This latest tax plan may be illegal but why would anyone think they are not going to get away with it? Republicans control the country, this is TrumpAmerica.
7
Suppose I buy 100 shares of IBM during 1975. Suppose the dollar value of this stock has tripled by 2018. And the cost of living in dollar terms has tripled since 1075. If my purchasing power has increased zero due to inflation during the 45 years, where is my profit? Remember, I originally purchased the stock with after-tax money which I saved after paying income taxes. Paying an additional tax seems like confiscation
1
How about mandating that workers' wages be tied to inflation too?
9
This is the logical end game for the Citizens United decision. Rich people rent enough senators to get Roberts and others on the court. The justices declare that money is speech and that the peasants are not even allowed to know the amount of the bribes. Now politicians like Trump can even get money from the Russians to run for office. Of course, once elected they are going show their gratitude to the Kochs, the Mercers, the DeVosses and others who rigged the deal. What better way than a capital gains cut?
11
@Rich Fairbanks. So true. Greed will do as greed does, always has, only laws can harness that wild pony, & legislators have been busily dismantling those reins for nearly 4 decades. Campaign reform & end-run around Cit v United should be at top of Dem Party do-list. And voters should find candidates funded only by non-corp small donations.
5
I get the distributive effects and I don't have much skin in the game, but it kind of makes sense to adjust asset prices for inflation - any assets - be it securities, bonds or houses - for the purpose of assessing capital gains taxes.
If you bought $100 worth of stock 30 years ago, and you sell it today for $120, you actually lost money in real terms, but you end up being taxed on the $20 in nominal gains.
3
@NH It also makes sense that if you went to work for Company XYZ 30 years ago for $5/hr. and now make $15/hr. you are actually working for less money than when you started and are much more valuable in terms of skills and experience than you were as a new hire. At any given time, most workers' hourly wages are not keeping up with the cost of living, which is why many have to get second jobs. How about we mandate wages be tied to inflation too?
10
@NH ...at a considerably lower rate than on ordinary income. The only way this move makes sense is if cap gains are taxed as ord inc. Even then, if it's a net loss to the treasury -- & esp as it re-defines tax law-- it's in Congress's bailiwick, not executive's.
4
Why should the rest of us help offset a person's bad investment. Investment is about risk. Its not as though there aren't enough people willing to take risks. So rather than help those of us who can afford to and are willing to take risks, let us help people who really need it. It isn't fair people who work many more than 40 hours a week, aren't paid a living wage by employers who are earning record profits. Its not fair employers are offering several people so few hours instead of one full time employee just so they don't have to pay benefits.
Join me as a stock holder trying to make employers act fairly towards employees.
12
Crony capitalism is government intervention to help one group of capitalists over others. Lowering the rate of capital gains taxes is like Trump’s tax break—if benefits the entire capitalist class over the people. Trump uses government to accelerate the three decade long systemic trend in neo-liberal capitalism to concentrate wealth and power in the .1%. Calling it illegal crony capitalism puts the blame on Trump, when he is both product of and executor over neo-liberal capitalism.
2
There is no such thing as a democracy or a capitalist nation without a middle class. The United States is no longer a democracy (if ever we were) and we certainly are no longer a capitalist nation. We are an oligarchy ruled by less-than-benevolent dictators.
6
One of the many millions contributing to the chant "lock him/them up". Mnuchin, remember you to can go to prison.
2
I’m betting the Robber Barons are planning on paying for this by taking another $100 billion from Medicaid, SNAP, and AFDC to help the poor become more self-reliant.
5
From Robert Reich's article in a recent Guardian UK ...
" ... the richest 10% of Americans own about 80% of all shares of stock (the top 1% owns about 40%), and you get a broader picture of how and why inequality has widened so dramatically."
All Mnuchin's plan does is continue the brazen practice of guilding the lily for the wealthiest Americans.
5
this is part of an economic strategy, the trickle-down effect. if you lower taxes on the rich, they have more money to invest in businesses, so it's good for the economy. if you lower taxes on middle class or working class people, they just spend all of their savings on cheap chinese-made diapers and tainted baby formula at walmart. who would you rather give money to--american businesses or china?
2
Yes in fact it's excellent politics, we could only pray that Democrats would come up with a political candidate for the presidency that is half this clever. I presume everyone here has read Machiavelli, so I don't need to remind that great politics is the one sport that makes Stanley Cup hockey look timid. The Neoliberal destroyed Democrats have practiced "play nice" pacification politics for so long their voters think hardball is to be avoided at all costs, which is why Trump go his defense budget increase, Obama didn't fight for a SCOTUS nominee, and we have never ending war for no national security reason.
I don't know whether there should be a tax preference for "investment" which after all should increase jobs if it's successful. I do think that gains due only to inflation rather than valid investment shouldn't be taxed as if they were income.
BUT - we sure as shootin' have a giant income/wealth inequality in this country, that needs to be fixed - or rather fixed by the solution we had when Eisenhower was President - namely confiscatory income tax rate above "too much income" - i.e., 91% as it was in Ike's time, whom I liked. Why doesn't someone calculate how much tax revenue that would bring in?
3
Let me see if I correctly understand this article and many of the comments. So you all think is it "fair" to have an investor pay tax on the sale of an investment where there was no actual gain in inflation adjusted dollars? As much as I try to get my head around Liberal logic (an oxymoron, I know), this one has me stumped. Oh, wait, I get it now. As long as it punishes "the rich," then its fair. Right?
2
@Southern Man. Oh boohoo. The investor is already getting a large tax break via the lower cap gains rate. If he made a bad investment why does JQ taxpayer have to take even more of a hit? If he wants to do better, let him sell when it's high. More likely he's dumping something before it tanks & getting in on ground floor of something w/better potential.
2
If it actually reaches the point of being sold to a skeptical public (as Congress members hold a wet finger from one hand in the air to judge popular reaction while reaching with the other hand to open their own wallets and campaign funds to receive the proceeds) I expect the messaging will be a dust-off of what was used to sell the death tax ... "We have to help save America's struggling family farms for the next generation!"
I suspect you don't likeTrump LOL. Perhaps a Democrat as President would be more to your liking.
For the last 18 months, I haven't read a single editorial positive of Trump.
Maybe a little biased?
2
It’s very difficult to find anything about this president to admire or respect. Possibly the only thing is the mandate from the Holy Bible to love one another. And one has to work on that regarding Trump.
4
since the tax break requires several years of inflation to make it amount to much its pretty targeted to stocks held at least 5 years. it should not be too difficult to find out who the actual beneficiaries are.
In the bigger context of fair taxation, this sounds pretty bad but it shouldn't. Suppose you buy shares in some company for $1000 and 30 years later, the stock is now worth $2000. Have you earned any money on your investment? Probably not. If there was an average inflation rate of 2.5% during the 30 years, then the $2000 you end up with is worth about the same as the $1000 you started with. You haven't really earned anything, but without inflation indexing, the IRS will want their share of this completely illusory gain. We should index capital gains to inflation. The real problems are elsewhere - like preferential treatment of unearned income.
3
@John M Your final sentence is the real key. For years I, as a former tax lawyer, have felt that the call for taxing capital gains at the same rate as earned income only makes sense if cost basis is increased by indexing to inflation.
2
@John M Seems pretty simple, doesn't it? However, explaining simple things to this crowd is a difficult thing. I guess they are mostly liberal arts majors. Thanks for trying, though.
1
For answers as to why the GOP base is so concretized in their views, I check (gag) foxnews dot com. Well I could not find one word about this proposed tax cut. I couldn't even find anything when I searched the name Steven Mnuchin, other than his own opinion videos, 3 months old now. News about this has been blatantly omitted.
We can all stop wondering whether this massive boon to the ultra wealthy will effect the poor white working class' view of Trump. They don't even know about it. Too busy watching channel zero.
Idiocracy.
7
NYT didn't seem to have a problem when Obama declared he'd bypass Congress with his "pen and phone"..... oh, but that was their guy, I see...
1
@dan rather False comparison. Obama was responding to a Congress that promised to kick down any and all of Obama's initiatives irrespective of merit. No serious consideration at all.
2
The fabulous comments posted as NYT Picks unveil the fraudulent claims of a pseudo populist prejudiced president pandering and prevaricating for the haters at his rallies exploiting their bigotry to disadvantage them to assure the 1/2%rs get all they want and much much more. The moral vacuity of Trump and his advocates unveils the rise of hate, bigotry and greed as the center of his reign, our version of Il Duce.
3
Yeah, I'm sure Trump's base in flyover country anxiously watches their stock portfolio's worth rising and falling.
Every construction worker, factory worker and coal miner has thousands of dollars in Apple, Facebook and Tesla stock.
2
This proposal proves 2 things:
Greed has no limits
Many people’s justification for this immoral administration also has no limits
5
This is why Republicans win a lot! They dish out generous portions of pork (tax cuts are their favorite,) especially to wealthy donors, and frequently just before critical elections.
1
It might make some sense to consider this approach to real estate held for long periods of time; 15, 20 years? This would actually help much of middle income America whose biggest asset is their house and the effects of inflation over the longer period of time can be drastic. I suppose you could also apply it to other investments held that long, but that is not my focus.
1
@Jerry in NH Last time I checked, you don't have to pay capital gains on the sale of a house owned more than two years.
3
Additional issues for the 90%:
Indexing capital gains tax for inflation will be a further blow to the conventional IRA: eventual distributions are taxed entirely as income, rather than capital gains.
The Roth IRA avoids further tax, although neither IRA helps mitigate any losses.
1
@Edward IRA and 401k losses can be deducted as long as you itemize your taxes.
2
@John IRA and 401k losses are measured by value under basis. For a standard IRA or 401k the basis has already been tax deferred and therefor there is no taxable loss. For a Roth IRA the value would need to go below the basis. Also, any such loses to an IRA or 401k is taxable as a miscellaneous itemized deduction subject to the excess over 2% of adjust gross income. The likelihood of deducting any IRA or 401k losses is very very low.
I entirely agree with the proposal, but to be totally fair, it should also apply to the American Treasure, so when inflation hits the USA, that factor should be taken into account and be added to the nominal interest associated with those Bonds.
One has to be consistent with the ideas applied.
It should be pointed out that this tax proposal enables the richest to double-dip with respect to inflation. Assets which produce capital gains are already priced to factor in inflation - it's part and parcel of the expected rate of return. Any first-year undergraduate finance major knows that.
But why stop there? Rob the Treasury further under the guise of inflation indexing.
This is a scam, pure and simple. Mnuchin and his ilk know it and they are laughing up their sleeves, crossing their fingers that the ploy works.
10
Such hubris. But if the goal fo the uber rich is the further gird the moat around their wealth, then this is a brilliant move. While the rich get richer, the rest of us will have to deal with crumbling infrastructure, low wages, declining safety on the job, a growing dirty and polluted environment and no recourse as Trump continues to starve and dismantle our government.
Need more evidence? Consider the recent alarms about the rocket speed of debt accumulation and record borrowing this administration is foisting on us. To all of the Trump supporters - you absolutely have no right to gripe and complain about "the government" we have now and as it worsens down the road. You made this bed, but we'll all have to lie in it.
6
Donald Trump is not out to make America great again; he's out to make himself and his rich friends richer. The man has no shame, and too many seem not to care. In our racism and bigotry, maybe we do deserve what we are getting.
See: RevolutionOfReason.com
5
Should capital gains be indexed for inflation? If you're a knowledgeable, well educated person you might want to debate the question, but the average person, Trump voter or not, won't because they can't understand it. It's too technical and arcane for a sound bite or a bumper sticker. It's a heist that can be done in broad daylight while the Orange One keeps everyone's attention - the New York Times's included - on the emotionally inflammatory issue of the day (which won't be inflation indexing on capital gains).
4
Trump and Comp. always complain about the laws but never bother to change them. The president and his party control government. He should propose legislation and Congress should debate it -- in public so people can see what's going on.
The notion that they can deconstruct the administrative state when it comes to regulation they don't like, but employ it to favor the rich is just about what we expected with the election of an entitled capitalist scofflaw like Donald.
While the media chuckled at Trump's campaign antics and sold papers, the people were short-changed on the man's business activities and connections.
5
Surely, the conservative media will point to this piece's logic as completely missing the point, yelling that liberals misrepresent Republican trickle-down attempts to invigorate the economy as "pure greed".
What Trump supporters don't realize is that buying into these outdated Reagonomic ideas drives the share of wealth further towards owners of capital and away from labor. This stifles middle-class wage growth and perpetuates the "winners take all" conundrum of entrenched inequality. What's sad is that non-partisan research shows these policies don't work for the middle class, but conservative orthodoxy keeps Trump supporters buying into the economic policies that hurt them the most.
5
Congress, by its lack of action, has sold out to the highest bidder.
Enter the Brave New World of "Citizens United".
8
Perhaps it's time for the average Americans to stop paying taxes.
1
@Bun Mam Nearly 50% of Americans don’t pay federal income taxes now.
1
Of *course* it's legal! Just look at the Constitution's Preamble!
"We the Wealthy of the United States, in Order to form a more perfect Elite, establish Protected Rents, insure domestic Tranquility, provide for our common defence, promote the general Welfare just enough to forestall insurrection, and secure the Blessings of Liberty to our wealthy selves and our Posterity, do ordain and establish this Constitution for the United States of America."
I mean, that *is* what the Founders said, right?
3
As an engineer, I work with present and future values of money all the time. A fair assessment of value should be based on an accurate inflation correction and whatever year you wish the dollars to be in. It's not a hand-over unless someone tilts the scales and uses an inaccurate correction factor.
1
Since rising house costs, or "housing inflation" does not track with the broader "core inflation" rate, can we conclude this move would end capital gains on housing?
Unlike the cost of gasoline or automobiles which have significant "supply and demand" and "wage inflation" considerations in price inflation, houses just sit there. Home values (like nearly all real estate) climb when people find them more desirable, such as when neighborhoods gentrify. Other than maintenance and possible remodel or addition costs (which would be credited back against the "cost" anyway) there are no wage or cost considerations in housing inflation.
So, can we then conclude capital gains on homes and perhaps all real estate would be wiped out by this proposal?
What's the estimate for how much trump’s Crony Capitalist Carl Icahn will reap?
1
I wish that once in a while pieces like this would remind readers what the income was of the top 0.1 %, the top 1% and the top 10%. The top 1% is thrown around all the time, and I would bet that most readers have little idea what your annual income needs to be to be in the top 1%. Giving a dollar value for the top 1% would help readers much better understand where they themselves fall within the country than mere percentages do.
1
Well, I can say that I am not in the top
.1%, or the 1%, or the 10%; and am only grateful that life insurance benefits are not taxable.
1
Not income, Jlarsp. WEALTH. There is a huge difference and that is what people don't realize.
BIG wealth is now fleeing their manipulated stock markets because of the global financial meltdown they see coming and buying up choice real estate around the world - the better to rob us with.
It is ludicrous. They got their supposed wealth by stealing from US through tax evasion and un-taxed inherited wealth, most of it accumulated through OUR government contracts.
It is past time to tax the hell out of them and break up/regulate/tax BIG companies.
4
@njglea Avoiding taxes doesn’t create wealth. It may increase the amount you get to keep, but that is not at all the same as actually creating wealth.
Thank You, New York Times. It is past time for serious headlines like this one to alert the American people of how The Con Don/Koch brothers-led International Mafia Top 1% Global Financial Elite Robber Baron/radical religion Good Old Boys' cabal plan to strip OUR United States Treasury - funded with OUR hard-earned taxpayer dollars - and OUR resources for their own insatiably greedy, socially unconscious, demented larders.
WE THE PEOPLE are the only ones who can/will stop them and NOW is the time. There may not be another time for centuries.
Remember Rome.
5
And why do we keep hearing about the danger of Democrats moving too far to the left? Bernie Sanders, like him or not, hits this one on the head. The top 1% keep getting richer, while everyone else falls further behind. Coupled with a corrupt campaign finance system, this means we have become a plutocracy. Progressives understand this. Moderate Democrats and Republicans do not. Let's face it: the class war started a long time ago...and it was started by the super rich.
7
@Jon, I think moderate Democrats understand this too. I think the differences within the Democratic Party are ones of strategy, not goals.
2
@Jon America has the wealthiest middle class of any large nation in the world.
1
The NRA and its members accused Obama (and Democrats in general) of plotting to show up at their front door and take their guns away. Now the Republicans are in power, they want to come around and take away everything--Social Security, Medicare, Medicaid, SNAP food for kids, environmental protections, national parks, clean water, clean air....
But they'll let us keep all the guns we want. Looks like we might need them.
6
@carrobin Please provide a link to any current proposal that eliminates these programs.
1
Recurring theme with this administration: Socialize the costs, privatize the profits. The tax cuts were a gift to savers, they can use it to hedge against inflation. Borrowers didn't really benefit from the tax cuts but they will bear the costs of the inflationary policy. Millions of struggling Americans will now need to pay higher interest rates on their student loans, mortgages, auto financing, credit cards, small business loans, etc.
2
Although this new tax proposal favors the rich who are the main holders of stocks- it also deals with real estate and that helps the middle class. The middle class 's main and often only asset is the home,taxed at the high capital gains tax rate when the home needs to be sold as people get elderly.(often to gain entry into assisted living or a nursing home.)
Making this proposal apply to such a situation more and stocks less would greatly help the middle class.
2
Mildred makes a very good point. The middle classes' primary asset is their real-estate holding, their homes.
And since the great shift away from defined benefit pensions, the overwhelming majority of the "middle class", indeed ever class that is involved with funding their own pensions, have an asset that rivals their primary one...Their IRA and 401K accounts.
While the greater part of the IRA/401K assets are free from taxation, there ARE portions that remain taxable. And these portions would greatly benefit from the change in how capital gains are calculated.
Unless you are willing to separate and target the 1% with discrete taxes, anything you do in this area needs to treat all classes of people with a degree of consistence.
Many people would dearly love to have the rich taxed far more heavily...I get that.
But what those people have failed to understand, even Democratic Party control of the law making function finds it truly difficult to get the needed legislation passed by Congress.
And please don't trot out the meme that the rich by the votes of the people in the House and the Senate. It's basically an urban myth. The most serious observer and catalogers of our political process, Larry Sabato's researchers at the University of Virginia have found little evidence that money pays a part, let alone a significant part, in our elections.
2
Homeowners get a one-time exemption from the capital gains on a residence which nearly all middle-class homeowners employ, usually when they trade-down to a smaller home for retirement. Ergo, this tax proposal does nothing for the middle-class homeowner. Invoking the merits of this so-called benefit is a fig leaf for looting the Treasury some more.
@The Owl writes:
"researchers at the University of Virginia have found little evidence that money pays a part, let alone a significant part, in our elections."
Then why do the rich spend so much on lobbying and elections?
Can we start with the fact that if the return on your investment does not exceed inflation, you have not made any money? A capital gains tax that isn't indexed, is taxing paper profit and as a result, after taxes the investor has a negative real return. Regardless of who benefits, this is just wrong.
Now indexing, coupled with higher rates on real capital gains makes sense. To be even fairer, if the government wants to be paid when an investor takes risk, it should also share in the losses by eliminating the cap on losses. The cap on losses results in carrying forward losses, subject to a $3,000 per annum cap on cap loss carry forwards. I'm still carrying forward losses from the financial crisis. Unless the cap on losses is fixed, a differential between capital gains and ordinary income is justified.
This can all be done in a tax neutral manner and would likely make markets more efficient.
#taxrealincome
1
For those in the top 10% of earners that rely on their wages to get them their and not investment income, be afraid! Suppressed wages and greater inequality will, at some point, affect the ability to maintain those very high wages. For those not expecting to be multimillionaires sever times over anytime soon, support a strong social safety net. You'll need it eventually.
4
When you don't adjust for inflation, you are taxing phantom gains. This is a matter of fairness. We adjust social security payments for inflation, and many other government progams as well. Why not capital gains?
1
Painful debt consolidation is coming soon. The republicans have be reckless in their tax cuts. Baby boomers are retiring and tax collections will soon collapse. The same republicans funded a TThe 2003 prescription drug program with no accountability and when the recession struck and fiscal stimulus was desperately needed they brought the US to thd brink of default. Obama, in sharp contrast was very responsible. He provided a temporary stimulus then restricted spendingp. The tax cuts will increase imports and make the dollar stronger, hurting the US exports even more. Debt is now at 5 percent of gdp which is highly dangerous and well above a safe 3 percent. Only the democrats can repair the GO
2
When the Dems resume power - they will be held responsible for the 'clean-up'. It will be harsh - and a new populist will arise. Of course the cumulative effect will continue to worsen...
2
@Leonard Wood...
I doubt seriously that the Democrats have the political will that is needed for a responsible "clean-up".
The track record of the Obama administration and his Democratic Congresses showed that neither had the power to achieve anything like a clean-up, and steered way clear of any moves to tax those making more money than others.
Indeed, not only did the allow the rich to continue to get rich, the bankers most prominently, they also just added to the burdens of the middle class without providing any real "success" or "product" that made the added burdens palatable.
No. There is not the will to pass the types of programs that you are suggesting, Mr. Wood, on either side of the aisle.
2
@The Owl, I'm not sure what you're talking about when you say the Obama administration added to the burdens of the middle class, but I assume you're referring to the ACA. Universal healthcare is a long topic in itself, and while I support an eventual Medicare-for-all system, I recognize that the ACA was a tremendous step forward. It very much benefits the middle class that everyone can buy health insurance, regardless of pre-existing conditions, and that individuals are subsidized when they purchase insurance.
Obama and Democrats did indeed enact Wall Street reform, financed the ACA partially through higher taxes on capital gains, and allowed the Bush tax cuts for the wealthiest to expire. They raised taxes on the wealthiest, and they did it despite a unified wall of GOP obstruction.
Imagine what they could have accomplished with GOP help, even from the few GOP moderates.
Think of the shift in perspective this change will make in how the financial world considers the power of 'inflation'. For those with lots of money, a high rate of inflation would be another tax-reducion policy in their favor.
For the rest of us, not so great.
2
So, under this "ruling" a Capital Loss will be figured the same way? That is, indexed to inflation, and thereby worth less on your tax deductions? Oh wait...what was I thinking? If we have an extended bear market, just declare the rule suspended.
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Capital gains are already taxed at barely half the rate imposed on ordinary income. This is a proxy for the effects of inflation, and is way over-generous because most gains are taken over a relatively short holding period.
And, importantly, there's no corresponding benefit for interest. If one really believes that the portion of investment gains that represents inflation should not be taxed - a reasonable enough concept - then interest, up to the amount of inflation, should not be taxed. Such a rule would benefit average working folks and would be fair to all.
As to cap gains, they shouldn't get to double dip. Either tax them at a lower rate as a (very rough) proxy for inflation; or exempt the portion of the gain that corresponds to inflation (better rule in theory, but really hard to administer). OR, if we want to favor income earned from working, tax all capital gains at the same rate as earned income so that working folks have more money in their pockets. This will eventually trickle up to businesses, etc. It's high time we adopted "trickle up" and no more "trickle down" (which doesn't happen much in practice).
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Political bribery once upon a time was illegal too. The Politicians changed that law to benefit themselves and their donors, why not this one too?
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So much winning …. for the 1%. I can hardly stand it !
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My first question for the administration is how are you going to replace the lost Federal income, and please do not tell me it will "trickle down." I would also ask if part of the rationale for a 15% (or less) tax rate was not the fact there was no indexing. We just gave the Pentagon an additional $50 billion, he wants to build a $26 billion dollar wall, he talks about infrastructure spending and he keeps trying to reduce Federal income. I'm guessing this is just a trail balloon that will blow away quickly.
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The only thing that makes reading these daily articles on the greed of this administration and its backers, the total abdication of ‘taking care that the laws be faithfully executed’, is anticipating the backlash in coming years. Maybe I won’t live to see it, but it will come; 90% tax brackets, bans on corporate rights, a new definition of pay to play......can you imagine the tax receipts from taxes on these auto-trading programs that buy and sell stock market shares....
Savor the thought.
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It's not just this heist. Betsy DeVos is busy increasing the burden on students' college debt and dismantling public education. Ben Carson at HUD is busy raising rent on low income people. Tariffs will make life harder for millions. Red states make it harder for single parents to feed their kids or get health care for them. We're also expected now to fund that stupid wall (not Mexico), a great military parade for our DearLeader, his family's business travel, and allow him to profit mightily from his 'public service' to us. He's shafting all of us, installing rich men totally disconnected from our lives, and tells us openly that he's on one team (Reds!), and half the country is another (evil Dems!) that must be defeated. I'm truly sick of whining cult members who will not see his destructive ways. When the ultra-ultra rich white 'christian' families rule your walled-off world, you'll wonder why your fellow Americans resent you.....
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Regarding the tax proposal to index capital gains for inflation, we already have a tax rate for long term capital gains that is lower than that for ordinary income, and have had for decades. Why was this lower rate included in the tax code? There may be several reasons Congress provided for a split rate; the unfairness of taxing long term gain attributable to inflation surely was a major justification. This latest proposal, indexing for inflation without a change in the applicable tax rate, looks like double-dipping for tax further tax preferences and is inappropriate.
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@Frederick Hilles, good point. One rationale behind lowering the tax rate for long-term capital gains was to adjust for inflation. If Treasury is making a second adjustment for inflation, there's no longer a need for different tax rates for wages and capital gains.
It seems to me that the same logic that indexes capital gains to inflation should also index wages to inflation. No one would argue that a $65,000 salary today is worth what it was 20 years ago.
I believe those who hated Hillary and abstained from voting love this too!
No wonder Trump loves Kim and Xi and Putin.. its what I believe we call Putin's Cronies - oligarchs.. Yuppy American Oligarchs close to "President for life" Trump! -- coming soon..
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Thanks for writing this. It appeared to have disappeared fron the news. The headline was basically unilateral $100B tax cut for the rich, with no Congressional involvement. Pretty shocking, even for Trump.
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This idea has been around a long time, as pointed out in the article. But this is the first time it's come up when Congress was so limp, so flaccid, so useless and so seemingly unconcerned about performing its constitutional duties as a check on presidential power.
Sad!
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And such perfect timing! Given that the proposal is almost certainly illegal, and a previous attempt was soundly rejected in 1992, the new heist will undoubtedly face a court challenge. What better time than when the Supreme Court, where the challenge may eventually land, is now fully partisan and packed with the mindset that will anoint as holy and proper this egregious grasp of power, this raiding of the Treasury. The previous photo op of Mnuchin and his gleeful wife holding sheets of printed cash was a harbinger of things to come.
2
The Republikans have no shame. None whatsoever. They do the bidding of the corporate oligarchs as happily as a kid in a candy store.
We are in real trouble here. We have a blatant, openly corrupt GOP doing everything in its power to perpetually feed the bottomless greed of those who control most everything financial in America, while dismantling a hundred years of institutional democracy and fleecing the vast majority of Americans, especially those struggling who voted for this.
I have never felt so helpless. VOTE THEM ALL OUT IN NOVEMBER 2018 and 2020. It is our only hope.
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I saw the justification for the corporate tax cut and it seems like its working. Growth is over 4%, millions are leaving food stamps, millions more are re-joining the work force etc.
The tax cut on individuals seemed like a gift to the wealthy. I had trouble connecting the dots to how that was going to grow the economy.
Now this additional tax cut for the rich? Makes no sense to me.
The problem I have with this isn't purely financial. It fuels the sense that people have that the system is unfair.
People don't resent it when someone like Steve Jobs gets rich. You use your iphone all day. We get why this guy is rich.
People do resent feeling the system is rigged to make people rich and powerful who don't deserve it. Rightly or wrongly, that is why so many millions didn't like Hillary. They felt she played the angles of being Bill's wife and wielded power to rig the system to become president (down to conspiring with the media to promote Trump because he was unelectable).
This is tax cut is wrong economically and sends the wrong message to the country about basic fairness.
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You can always count on leaders who have absolutely no humility to overreach. It is one of the human race’s few natural defenses against them.
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Great column, but I have a question.
Should you really call people who live on dividend interest "income earners?"
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@Panthiest They’re unearned income earners.
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We have had a large segment of our population that was already uninformed and uneducated about our civic and cultural history for many years ("Are You Smarter Than a 5th Grader?" was really not a joke). Add the purchase of many politicians simplified by Citizens United, the marketed distraction and satiation of a consumer society that's too busy to notice their paychecks haven't kept up with the cost of living since 1968, and no term limits of millionaires in Congress ... seems we have helped to grease the wheel of plutocracy, where anyone can become President, including a stupid narcissist. We've been ripe for Russian picking for decades.
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One day Congress might do the right thing, and tax unearned income the same as earned income. Then indexing the costs of capital gains/losses would be the rational and fair policy. It could result in a tax increase on the wealthy, depending on the rates that are set. Why should the income from a person's labor be taxed differently than the earnings of capital?
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@Solon Rhode Capital is necessary in a complex economic structure. Discouraging investment is counterproductive.
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@Solon Rhode
Because income taxes have already been paid on the money used to accumulate the capital.
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@Solon Rhode - Exactly! I, as a progressive/liberal, have actually argued *in favor* of a flat tax. My flat tax argument however would include ALL sources of income: wages, all capital gains, interest, rental income, dividends, estates, gifts, etc...
Additionally, the tax would only phase in when total income reaches a level that can provide a 'living wage' based on an actual adjustable measure - 30% of median income sounds about right.
My argument also makes hypocrites of the typical libertarian flat tax proponents, who typically only want it to apply to earned income. If libertarians actually believe that the government shouldn't 'be in the business of picking winners and losers', then why does the government tax different sources of income at different rates, which is in effect doing exactly that?
Thank you for this article. I have plenty of anti-Trump ammo, but, like most Americans, I have a pretty poor grasp of the intricacies of economics, but this is so bald and simple. It is so blatant that even we 90 percenters can do the math. I keep waiting for his own hubris to bring him down. I just wish it would happen before he's finished destroying the environment, the working class, the schools, the medical system, the world alliances, and any sense of decorum.
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many countries in the world-including some which the NYTimes and its readers laud in other contexts for their socialist tendencies- index capital gains for inflation.
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@pete - and then tax those indexed capital gains at a higher rate.
Nice try though.
@K.F. Excellent! You are spot on.
Two hundred and forty two members of our US Congress have cash and asset values exceeding one million dollars.
It is difficult for me to think these men and women have a clue how it is to live in the ethnic neighborhoods of Philly or any city.
We really are dopes to keep sending these people back to represent us. Even the few who grew up among us change once they get a taste of the money.
If governing were a business most of them would be in the unemployment line.
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Are you suggesting that we elect people not smart, ambitious or savvy enough to extract themselves from such conditions???
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The Corporate Democrats are able to say oh well we don't have any power to stop it but they truly love it.
@gene, is this satire? Every Democrat in the Senate and House voted against the 2017 GOP donor tax cut. Sounds like they didn't "love it" that much.
This one is being done without Congress. What is your proposal?
@gene Bill Clinton and Barack Obama were good for America and they are exactly the type of Democrats that you are referring to.
So the Trump supporters are being duped once again. The pity is that the very people who are the losers in this equation are the very people who will never read this editorial.
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You say, "Thus die the final vestiges of this president’s pretty little narrative about being a populist hero." But unfortunately his base only believes what they are told by Trump. If he says it's good for the economy, they would believe him! That's part of what makes this whole thing so crazy. Trump is such a blatant con man and half the country is screaming "Liar! Liar!" Yet, still his base will support him as he takes food from their children's mouths and hands it over to his rich friends.
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Now he wants to bankrupt the Federal Government? Anything for a buck. Vote
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In response to an 'economist' who equated his personal view of "fairness" for mother's house with this BREACH OF POWER. Here is an actual hierarchy of logic:
1. "Treasury Department does not have the legal authority to index capital gains for inflation by means of regulation.". This move by the Executive usurps Congress' power to tax. This move undermines democracy as our chosen form of government.
2. Every citizen should be outraged at this revolting power grab by the Executive.
3. Those office holders who do not speak directly against this attempt to BREACH CONSTITUTIONAL POWERS are 100% complicit.
4. Obfuscation of Congress' power and conflagration into some kind of "fairness" debate shall be seen for what it is --- the working against our democracy's separation of powers, and essentially against our democracy itself.
5. This is an attempted heist.
6. The wealthiest 1% would score 86% of the loot.
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The way to sell this plan to the hoi polloi is to limit the amount of indexed capital gains one can take in one year to, say, $25,000. Sounds like a pretty good idea to me and would help the average investor. But of course it doesn't do enough for the Sneering Plutocracy so it'll never fly
Nothing new here. The Republicans are shrinking the revenue base and boosting deficit spending as a prelude to eviscerating Medicare, Medicaid, and Social Security in the name of "fiscal responsibility".
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So, that upper 10% should be the ones to pay for Trump's wall, they should also cover the ever increasing Pentagon budget, Trump's 'space force' and those costly trips to Mara-Lago too. Seems only fair they pay to defend the country they bought and the little caesar they keep in power.
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For those in the middle class who struggled to pay their children’s tuition costs, to cover mortgage payments, and what ever else and who have all of their retirement savings in IRAs this tax cut is not for you. This is truly a tax cut for the ultra rich and those big inheritances from their loved ones. To the ultra rich go the spoils and to the rest of us decreased services and an increasing tax burden.
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Trump keeps proving he loves the little guy.
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GOP is Grifters On Parade...they certainly aren't hiding themselves or their acts of thievery.
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Steven Mnuchin: a one person anti-semitism movement. (OK, there’s also Mr. Kushner, Mr. Miller, Mr. Cohen and others.)
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@Robbiesimon I'm old but I try to stay up on the news, and I don't understand what you mean by this post. Could you explain? Thanks.
Isn't this just looting?
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@MRC letting people keep more of their own money is not looting. People taking your money is looting.
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Sure looks like it to me.
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A week after the first Tax debacle was signed by Trump (and never even read by the congress before voting for it), a couple, avid Trump supporters I know began to tell me how they already see the benefits in their paycheck. Of course this was impossible, yet they firmly believed it.
Despite decades of insurance premium increase, these same people believe that the entire health care problem was due to President Obama and Obamacare. You can't tell them anything different. They don't hear it.
Lastly, this couple believe that immigrants, both legal and illegal are the root cause of our financial problems, that Muslims are all terrorists and that despite Mueller's indictments, Mueller has not discovered one iota of evidence and should be dismissed.
Herein lies the larger problem nor is Trump the problem as Cruz or Pence or others could have been president with the same agenda but not the swagger. The problem is that the GOP forces have found a way to get the base to believe anything and everything they are told; it does not matter how outrageous.
Years of a diet of Fox news, Limbaugh, even Alex Jones and Michael Savage have accomplished what was intended. These people have been conditioned to accept a new paradigm and paradigms are all but impossible to change. Ask a Jewish person to convert to a Baptist denomination and vice versa. Try to reason with a Scientologist or a Moonie.
We have created the Cult of Trump. Yes, he could shoot someone on 5th Ave. Its a Scary time!
5
Di$gusting.
2
Welcome to the new world order.Bow to your king.May Baron Trump succeed when Ivanka retires!
Betsy DeVos (the Secretary of Education) is worth about 1.1 BILLION USD!?? It that before or AFTER the cost of the "run-a-way" yacht is deducted from her net worth!??
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The Electoral College failed us when they did not stop this incredibly under-qualified liar and his minions to denigrate the prestige of the White House and try to steer the wealth of this country toward the already super rich a la Pruitt and now Mnuchin.
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There’s a 60 day wait to order pitchforks on Amazon.
A reckoning is brewing.
Civil disobedience anyone ?
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And keep in mind what part of this lays at your feet, NY Times. Because it's your gleeful headlines that give this "(Build the wall! Lock her up! Gorsuch! Kavanaugh! Stand for the anthem or be fired!) their fuel.
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Envy is as evil as greed.
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@h dierkes Exactly right. Compassion is reaching into your own wallet, and giving your money to other people. Compassion is not forcing people you don't know to give money to people you believe are deserving. When you have little or no skin in the game, being compassionate is very easy. Those who virtue signal at no personal cost, while believing envy is not envy.
Rather than the movie Wall Street where "greed is good", how about Progressive Socialist Street where "envy is good"?
Well the one thing money can not buy is good health. So when the rich and mighty fall to something they can not control it will be like Lee Atwater as he was dying apologizing for the Willie political ad that was sheer racism.
Trump supporters are like battered men and women hoping that the next interaction will be different from the previous ones. The character of the GOP,CEO's have been on display and they are not going to change. We need to vote them out of office and be selective on what products we buy. If a corporation is buying there stocks back and not giving a salary increase to there employees don't buy there wares. Hurt them in there bottom lines. Vote with our pocketbooks and vote in the mid-terms.
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NYT, better late than never, I suppose. As the sands shift beneath our feet the rock of our refuge will be FDR's bold refutation of the oligarchs of his time: "I welcome their hatred". Please keep on this tack. Nice work.
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"You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time." Unfortunately, modern technology and social media has enabled Trump to target the some of the people'he can fool all of the time with astounding precision. I seriously wonder if they will ever be reached with evidence and reason again.
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@Derek Martin maybe it is you that has been fooled? Economic growth, low unemployment and less poverty seem like pretty good outcomes to the people you think were fooled.
@Dolf, you're crediting Trump because he hasn't blown up the growth that began under Obama yet. Will you blame Trump if the economy contracts because of his trade wars? Or will that be someone else's fault?
Why are we even surprised? Name me one thing that this Trump Administration did which was not meant only for the benefit of the very rich and privilaged class that they belong to? I am only shocked by the blatancy, the scale and the speed they are proceeding to build perhaps the most corrupt government on earth at this moment in history.
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@Ken what's good for the goose is good for the gander. AKA, what is good for the rich is good for the middle class.
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@Dolf. A brilliant economic argument. Trump logic.
Trump's base didn't vote for him because they actually believed he would improve their lives or help the economy. They voted for him because he validates their own mean resentful dyspeptic world view. As long as he's making all those "other" people miserable they're satisfied with the entertainment he provides.
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@jim No, mostly because he was not Hillary Clinton. The people in middle America frown on crooked politicians in the Oval Office. The good results are just icing on the political cake.
@Dolf. We’re all still waiting for her to be charged with something, or was this just another Trump lie? They come so often they are impossible to track.
@Dolf, no one who voted for Donald Trump cares about crooked politicians. They see the corruption in his cabinet, his family, and in Trump himself, and they're fine with it.
As for Hillary Clinton being "crooked," that's just a Trump line. Despite the right's best efforts--and millions in investigations--she seems to be pretty squeaky clean.
LOOTERS LOOT.
Unless we take deliberate, active and aggressive steps to reign in the greed that has been loosed upon us, the 'elite' will continue to hollow out our economy and pocket their diggings - offshore.
How many corporations have actually announced significant investments in America? Buying back shares, one-time bonuses and extra dividends do not get the job done.Why, you'd think they don't want to invest here.
Mueller cannot do it. Leaving us in the hands of Holy Pence will just provide a religious fortress patrolled by Freikorps for ensuring the greed continues unfettered.
We are in big trouble. Churchill had no idea what a Gathering Storm REALLY looks like.....
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This will all be lost on Trump's 40%. They watch Fox News and will never be given any insight into how this is just more welfare for the wealthy.
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@BobbyBow it is a tragedy when people get to keep more of their own money. It is much better to send it to the government machine to be chewed up and spit out with less value.
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@Dolf. Remember when the GOP used to lecture about the evils of the national debt? Now they reduce taxes with no plan to reduce spending. But no worries; Trump will find someone to blame.
I'm convinced that Trump has figured all along that his would be a one term gig. So his plan has been to wring every last dollar he can get out of the deal for himself and his buddies. They'll pay him his share of their take later. This latest proposal from Mnuchin falls right in line. It's a wonder to me that Trump's base hasn't seen the handwriting on the wall yet. They ought to be protesting outside the White House demanding his head.
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Can’t wait to hear from these thieves how this new tax cut will ensure additional trickle down by way of increased charitable giving by the 1%. Sort of like the lie told about the previous tax cut: it would juice the enconomy by encouraging business owners to increase pay for workers. Didn’t happen. When are middle class workers going to realize Republican policies hurt them?
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@JHC Wynnewood PA when people get to keep more of their own money, that money is invested or spent. Either way, it trickles though the economy. Unlike money sent to the government where is comes back in the form of less value. Government is not free.
@Dolf. Let’s see the government cuts then. But wait, an election is coming so the impact of spending cuts can’t yet be exposed. This is all about re-election, not economic responsibility
@Dolf, no, government is not free, which means that everyone should pay their fair share. You seem incredibly concerned with whether the top one-tenth of one percent is being taxed too much. You don't seem as concerned with whether the middle class gets to keep more of their own money.
Professionals in blue states are already paying more of their hard-earned income in taxes, thanks to the 2017 GOP tax bill. Within five years most middle-income taxpayers will be paying more, thanks to a provision in the bill that ties tax rates to chained CPI instead of traditional CPI. Unfortunately, higher revenues from middle-class taxes were factored into the ten-year cost of the tax "cut," which is why the cost is estimated at $1.5 trillion rather than $2 trillion.
That extra half trillion is coming out of your pocket.
The Government ignores the impact of repayment of debt with inflated dollars. Inflation is very carefully managed by an in effect self by a dealing organization called the Fed. Their job is to reduce the real cost of debt such that the economy does not collapse
The concept is of reducing the cost basis on a capital investment is only fair.
The inflation tax brings in a lot "ghost" taxes that mainly impact the rich. The rich have a good enough tax plan as it is. This plan, even though unfair should be DOA.
This is the exact opposite of what should be done, but not surprising from the plutocrats in power. Income is income, whether by the sweat of manual labor or investment, and should be taxed the same. Capital gains should be taxed at the same rate as earned income on a highly progressive scale. But good luck ever seeing that happen.
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@MikeH Even the most progressive nations in the world don’t tax capital gains as ordinary income. Doing so discouraged economic activity that is vital to everyone.
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Having read many of the comments here, I think a substantial amount of commenters don’t understand or appreciate that the failures they are complaining about are rooted in government failure, not failure of capitalism. In almost all circumstances, the government is failing to do its job, not the private sector. The government encourages bad behavior. Congress makes examples of companies and corporations that do not lobby and favor the ones that do. The system is perverted by officials who seek power and privilege from their government position. Making government more powerful doesn’t benefit the average citizen no matter what the economic system is.
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@John Unfettered power by ANY organization, be government, corporate, religious, what have you, is a problem. All humans need constraints.
And let me just point out that much of capitalism as you know it wouldn't exist without a strong federal government. Go reread your American history - with a focus on Hamilton's view of the importance of Federalism.
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The problem is that government has too many “jobs.” It should strictly hew to the Constitution and not have become the driver of social policy, motivator of economic activity and determinant of success or failure. For better or worse, allow the free market to decide winner and losers.
@From Where I Sit, there has never been a free market. From the birth of cities onward, trade has always been constrained/managed by those in authority, whether kings, trade guilds, the castle guarding river passage, or parliaments.
Unfettered capitalism is as utopian and unworkable as the command economy of communism. Markets need reasonable restraints to survive and thrive. What we don't need is the kind of corrupt rewarding of benefactors we see under Trump.
Many people say that Trump is horrible but Pence would be worse. I disagree. I could be wrong but I don't think Pence would have the interest or chutzpah to push something like this if he were president. Plus, he's enough of a standard politician to care about the political message this sends. In my view, Pence would be horrible but Trump is worse.
@Ken. He also might occasionally speak the truth.
I would benefit financially, but the cost of selling my soul is much too high. Wrong move, Emperor Don.
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@CP You can always send your new found surplus to the US Treasury on a voluntary basis. I for one would like to keep mine. After all, it was inflation that ate it any way.
Is it possible to be shocked by this administration anymore? Now they are just blatantly looting our country. Donald Trump is nothing but a distraction while the GOP robs us blind. 2018 is the most important election of our lifetime, our only chance to stop or at least slow down their thievery.
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@Junctionite how is letting people keep more of their money looting the country? Letting people keep more of their money is the opposite of robbing you blind.
If elections are as important as you think they are, maybe government has too much power?
What a great idea! Change the meaning of a single word "cost" as previously understood, to a new meaning and reward yourself and the other fortunate few with a $100 Billion tax cut.
This gives Mnuchin's previous trip to Fort Knox at government expense new meaning. The 49'ers knew "there was gold in them there hills," but it took a lot of hard work to get it out. Willie Sutton robbed banks because "That's where the money" and now, at the stroke of a pen Mnuchin can loot the US Treasury and make a $100 Billion without breaking a sweat.
And even better, he can use the government's own lawyers argue his case at no expense to himself.
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Professor Thomas Piketty in his noteworthy book, "Capital in the Twenty-First Century," addressed the growing inequality in the US economy as more and more national income is allocated toward rents for shareholder investments and less toward wages. This tax cut targeted at the wealthy seems another instance of the overall pattern described by Dr. Piketty.
This afternoon (08/01) the Fed will probably announce that it will not raise the current federal funds rate in the face of the mid-term elections less than 100 days away. Increasing interest rates would raise the value of the dollar in a period of international uncertainty due to increasing global tariffs. As the dollar increases in value, US exports become more expensive while imports become cheaper substitutes for domestically produced goods.
ADP, a private-sector payroll company, reports that in July 2018, 219,000 private sector jobs were created, a very robust number. So, Friday's DOL report should show good jobs growth, too. But, how many of these jobs are attributable to the after-effects of inventory surges made to beat the tariffs?
With the corporate tax cut from 35% to 21%, only 60% of the original tax remains, as ammo, to "juice" the economy, with 40% of corporate taxes already being fed to its maw for artificial growth. The menu of viable options for priming the economic pump seem to be diminishing. Perhaps too many stock buyback plans have been empaneled in boardrooms.
[8/1 W 10:39 am Greenville NC]
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In the Federal tax law just passed in 2017, there is a new provision for investors to invest in funds that invest in projects and businesses located in certain poverty impacted census tracts in each state ( and some contiguous tracts). Investors in those funds realize tax credits applied to the capital gains from those projects. Unlike Low Income Housing Tax Credits, any fund investments in multifamily projects do not have to be all or partially limited to housing for low and very low income families or seniors. Then there are Roth IRAS in which post-ordinary income tax funds are deposited and neither gains from investment income such as dividends nor capital gains will be taxed at all upon withdrawal at age 59 or later. Gain for sale of personal residences are not taxed at all if they are less than $250K for individuals and less than $500K for couples and then only the gain over those amounts are taxed at capital gains rate which is already less than tax on ordinary income. So now Minuchin wants to add another preference for capital gains? All together some nice reverse Robin Hood tax laws. What could go wrong?
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Inflation is a subsidy for speculators. In most passive investments where you do not actually build something, the capital gain is due to inflation.
This is especially true of real estate. You buy a property, pay the mortgage, and wait for inflation to increase its value. This would essentially end the tax on profit from real estate speculation.
The Trumps and Kushners would save billions in tax on the profit they get from selling properties.
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@mlbex, thank you! Among the biggest beneficiaries of this new giveaway would be real estate speculators like the Trumps and Kushners.
All of the tax laws passed under Trump seem designed to benefit his family in particular. The 2017 GOP tax bill allowed the Trumps (and the Kushners), whose businesses are designated as pass-through entities, to subtract 23 percent off the top of their earnings before paying taxes.
No wonder Trump doesn't want us to see his taxes. In addition to all the Russian investments, he probably hasn't paid taxes in years.
It's understandable why you don't like the idea, but it would be appropriate to at least note that it's logic is correct. If you buy a stock for $10, hold it for 5 years during which period inflation has, cumulatively, been 10%, and you sell that stock for $11, you have a paper 'gain' of $1, but in fact the buying power of the $11 is exactly the same as the buying power of the $10 when you bought the stock, and you therefore have no real-world, actual gain.
We index all sorts of things, including Social Security benefits, because of this reality. That you don't investors being treated in the same manner in this context as pensioners is understandable, but your credibility is low if you fail to at least note that the underlying position is, in fact, correct and consistent with how the government handles inflates in other contexts.
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@Steve Walton: If you apply the same logic to real estate, something odd happens. Normally, you buy a property, rent it for a number of years, then sell it for a profit. If during that time you did not essentially improve it, all of the profit you made is from inflation. That is the key to real estate investment; buy, hold, wait for inflation, sell, pocket the difference.
Should that profit be tax-free?
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@Steve Walton
Why is there no push to index the minimum wage to inflation?
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@mlbex Answer...yes. Stop taxing capital growth (or in this case inflation gains that mean no real growth).
It seems to me that W reduced the capital gains rate from 28% to 15% (now 20%) to compensate for the inflation rate. Of course, he might have over-compensated by changing the long term rate to take effect from two years to one year, and more than a few billionaires suddenly showed up on Forbes billionaire list, so what's a few more?
I can't wait for major corporation boards to start shifting dates on stock options for CEO's and other major officers.
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@Dave S
Preferences for all long-term capital gains is a very clumsy way to compensate for inflation. It would be far better to adjust gains explicitly for inflation, and then to replace the long-term/short-term distinction with a "qualified" and "unqualified" distinction as with dividends, where qualified gains and dividends would be from C-corporations that have already paid the now 21% corporate income tax.
I favor abolishing the diabolical Worksheet for Line 44 and instead simply adding half of qualified dividends and gains to ordinary income (along with all of unqualified gains and dividends), and then adjusting the corporate rate so that the max burden on investment through C-corporations is the same as the max burden on pass-through and skilled professional income. With a top personal rate of 37% as at present, this would make the ideal corporate rate 22.7%. But both should be even lower.
For details, see my "Tax Reform for Investment Income," at http://blog.independent.org/2016/11/26/tax-reform-for-investment-income/
1
I'm pretty sure "crony" Capitalism is just the same as good old capitalism.
2
@Mike: There is a type of capitalism where you actually create something useful or fun and sell it for a profit. That is not crony capitalism, but it seems to be taking a back seat to crony capitalism these days.
2
@Mike, that sounds like easy cynicism. We need capitalism because command economies don't work, but we need well-regulated markets combined with a strong social safety net.
This is obviously an accurate critique of the President's policy. What's scary is the people I come into contact with at my low wage job. They would never read this or blame white collar CEOs for their financial hardships. It's heartbreaking and maddening to witness the poor side with the GOP and our bully-in-chief.
3
Knowing that this will become another nail in the Republican election coffin, does anyone think they will wake up and put a stop to this? If Democrats take back congress, will they be able to prosecute the perpetrators of this crime? WILL they?
1
Low information voters will yawn at this. Trump rallies are hate festivals where people are told to believe only trump. And they have won in the sense that truth no longer matters. He's destroyed our democracy. And the Republican Party could have done something about it but keeping their jobs is all they care about. If we survive as a nation this will be remembered as our lowest point, right after slavery.
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@Tardiflorus What Liberties has Trump taken exactly? How has he destroy our republic? By stream lining regulations? By growing the economy? He is returning freedoms, not taking them away.
I don't particularly like him as a person, but we elected a president, not a pope.
@Dolf
this president lies as most people breath. It's important to use that word: lie. He has given the directive at his rallies to believe only him and not "fake news" which is basically any real information or opinions from former CIA directors to the Koch brothers. Suspending security clearance for Clapper should give us all pause. He has undermined the truth with such skill and force that it is actually working. People do not know what to believe. That is a classic tactic from totalitarian regimes. If you call the press the enemy of the people or state? C'mon, If he wins 2020 I believe he will begin to go after American citizens who he sees as a threat to him. From "lock her up" to "hillary for prison" he is a classic con man, riding on a wave of hatred and this can only be described as a cult of personality. We did not elect a pope you are right, nor did we elect a dictator. a very large portion of the electorate is demanding that he simply respect the office of the president and act like one. stop sucking up to Putin would be a good place to start.
@Dolf, you don't like his crude bullying or his explicit language about what he does to women? You don't like his encouraging racists at Charlottesville? Separating children from mothers? Filling his cabinet with corrupt swamp creatures?
No, he's certainly not pope material. I would argue that he's not presidential material either. And we, the voters, didn't elect him--the Electoral College did.
The US 10-year Treasury Bond went over 3.0% again today. The debt expense will start piling up as the full effects of these misguided, corrupt tax plans take hold. Lies and misdeeds are the hallmark of Republican governance, a true oxymoron, and will result in financial hard times for the 99%. Wholesale robbery of the treasury is their "strategy" until they are stopped.
2
It's worse than this. The only way to lower the ballooning national debt is to raise taxes (yeah, right) or raise inflation so as to pay it off in cheaper dollars. Inflation is a tax that favors the rich who disproportionately hold hard assets. This removes a barrier to letting loose that vampire.
1
@Paul C Terhune No, you can lower spending, grow the economy and start paying down debt.
I agree that inflation is a terrible thing for everyone. But it is a silent killer of wealth, especially for the middle class.
@Dolf, which Republican administration over the last 40 years has ever decreased deficits? Two Democratic administrations have.
The pattern I've observed in my lifetime is that GOP administrations act with reckless abandon toward the national debt, then Democratic administrations come in to clean up the mess. You're trying to claim a brand for the GOP they don't deserve.
May the beneficiaries of these tax give aways spend their money on lawyers just as Mr. Manafort is now doing and may they all end up wearing government issue clothing in government provided housing.
3
Can we just dispense with all this tap dancing and just give all the money to the top 10%? I mean, they're working hard every day and night to come with all these little incremental steps, and they're going to get it all eventually anyway, so can we stop wasting all this time and effort and just give it to them and be done with it? After all, every single one of these tax break for the rich proposals comes with the promise of an improved economy, so what are we waiting for? Let's just give them ALL the money, and let them get busy expanding their businesses, hiring lots and lots of new employees, giving everybody big raises....
This could dovetail nicely with the new post card sized income tax return we were promised. You put your name at the top, then list all your bank account numbers --- you wouldn't even have to put in how much is in each one, since they're going to take it all anyway --- and then sign at the bottom where it says they can have all your money.
Mail it in, then sit back and wait for that economic boost to kick in. You'll be employed at a good paying clean coal job in no time! Best of all, we can stop whining about how much more money they have than we do. After all, they've already got 99% of it --- how much more could it hurt to just give them the rest?
4
"As political messaging goes, it seems flat-out bonkers to position Republicans as the party of the superrich — especially during a critical midterm election campaign with control of both houses of Congress on the line."
We need to stop worrying about how the GOP positions the GOP.
It's irrelevant to our cause and whiny besides.
Everybody knows the GOP are the party of the "superrich", even their "superpoor" base who have shown over and over that they couldn't care less (or as they might say, "could care less".
As far as the legality of this very clever "re-imagining" of cost basis goes, it's definitely a brazen and outlandish ploy, but given the "ideological leanings" of the current supreme court, I would not bet the farm that they would rule against this gambit should this overreach make it that far. Of course, if it's green lit by executive order, there's a very good chance it never get's challenged in court, as somebody outside of government would have to be granted "standing" to sue, and that is not a "slam dunk".
All that being said, of all the insane and infuriating things this administration has done so far, this one doesn't make my top ten, which says a lot.
It really is an interesting time to be an American, isn't it?
1
This plan may very well be illegal. And there was a time when we could be confident that if it came before the Supreme Court, there was a chance that the only question would be its legality based on an unbiased reading of the Constitution. But the rot that has crept into politics has found its way into the one institution that is supposed to be the ultimate safeguard of our civil liberties and a check on the excesses of the other branches of government. Which is to say that if 5 justices were to like this ruling, they would find a rationalization for it.
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When Obama bailed out the bankers and decided not to prosecute any of the architects of the Great Recession, it was called responsible government. When Trump threatens to pad the coffers of the superrich, it's called crony capitalism.
21st-c. capitalism is crony capitalism.
2
@TSK, apples and oranges. Bailouts for the largest financial institutions--which began under Bush and which have been repaid--were necessary to stop a second Great Depression. I agree that bankers should have been prosecuted, and confess I have no idea how feasible that would have been.
What's happening under Trump is looting of the Treasury for personal profit.
Fine, account for inflation. That's actually reasonable. I'll agree to that "reform" if you agree to tax capital gains at the same rate as ordinary income in all circumstances.
If you say that's not fair because it took years for the gains to accumulate, I'd say you can elect to declare the gains in each of the years they occurred, rather than all at the end when they are realized, if that is a better tax strategy.
That sounds fair, doesn't it Mr Wall St?
Hello? Are you still there?
*crickets*
3
@Nobody
Gains on investments in C-corporations that have already paid the now 21% corporate rate should be taxed at a lower rate than other gains, in order to equalize the marginal burden on all kinds of income, with no distinction for long- and short-term gains.
For details, see my "Tax Reform for Investment Income," at http://blog.independent.org/2016/11/26/tax-reform-for-investment-income/
1
Cynicism isn't the problem with this interpretation. The authors are missing intent. We hear about the impurity of motive. By definition, motive implies intent. "Why the heck not?" is not a sufficient explanation for either. Allow me to purpose an alternative scenario.
If I had to guess, Mnuchin and the Trump administration have had this idea in the wings for awhile now. Anyone seriously eyeing the capital gains tax would naturally consider a regulatory response over a legislative solution. I'm sure the Bush opinion surfaced with only minor research. I'll agree the disregard for legal challenges is a "nothing to lose approach." The tax payers are footing the legal bill.
However, there are political consequences regardless of the legal merits. The question then becomes a matter of timing. Not "why" but "why now?" I have a suggestion: Charles Koch has something to do with it.
This explanation can break in one of two ways:
1) The Trump administration is floating a bribe to regain Koch's support of pro-Trump candidates in the mid-Term elections. Alternatively, Mnuchin is sourcing alternative financing for pro-Trump candidates.
2) The Trump administration is already anticipating defeat and therefore no longer cares about the political blow back from their actions. Koch withdrawing financing over tariffs is an ominous signal for Republican chances this fall. That might signal the Trump administration is already planning for a minority congress in 2019.
Just a thought.
1
How, I wonder, does what trump and his minions are doing, and have done with the country's treasure, differ from what we as a country have railed against in third-world countries where a strong man steals the country blind and leaves its people with nothing but sand a bloated bellies? Just wondering.
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@David Kannas He is not stealing, he is letting people keep more of their own money. My money is not part of the country's treasure.
The problem is that Trump’s base believes in the prosperity gospel tradition. Send your wrinkled dollar bills in and we’ll pray for you to become rich. They look to the obscenely wealthy and do not realize that wealth only comes from taking from others. They think that somehow, with Trump’s magic beans, they too can have a private jet. And that exploitation of faith, or gullibility, is even more depressing that capitalism on steroids.
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@TSquared wealth comes from creating value for others. That's what the left keeps forgetting. The magic beans are thinking that government creates wealth. It doesn't. It consumes it.
What will it take for his base to wake up? The Republican Party is the party of the rich. They can’t wait to destroy Social Security and Medicare using the excuse of the deficit they created with their tax cut to corporations. They will drive the economy off the cliff making the rich richer and the democrats will ultimately have to dig us out again. Only this time I hope it’s not too late.
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@Marian Republicans are the party of the rich? I think you should go back and see who spent more money on presidential campaigns for the last 30 years.
@Dolf, where does the Koch super-PAC spend its money? Who did Steve and Rebecca Mercer underwrite? What party do Sheldon Adelson and Steve Wynn belong to?
Clearly the GOP is the party of the rich. However, more important than looking at specific donors is looking at GOP policies, like cutting taxes for the top one percent. That's the only principle they've stuck to under Trump.
The Emperor has spoken. The super rich deserve another tax break.
2
@robert s How about you be more accurate and say people with inflation affected capital deserve another tax break.
@Dolf, two-thirds of the benefits from this new rule would go to the top one-tenth of one percent. 87 percent would go to the top one percent.
Sounds like the super-rich to me.
What is missing in any analysis of indexing capital gains for inflation is the fact that capital gains are indexed for inflation -- already. They are taxed at a lower rate, specifically as a way to (albeit inaccurately) provide for a lower tax on those investments presumably held for longer period (capital investments).
To index what is already indexed is to double dip -- not a surprise for this administration but utterly ignored by everyone writing about this give away.
6
Maybe we should index the costs according to the Trump methodology. Value the cost and sale price by how you feel at the time. Hey, that stock I bought at $10 was underpriced and I felt was really worth $50, and that same stock I sold for $100 was overpriced and really only worth $60. So my capital gains should just be based on $10 not $90.
4
While I completely agree with the sentiment of the editorial - that we should not be continuing to give tax cuts to the well-off - as an economist I believe that in the calculation of income for the purpose of determining income tax liability, inflation should be taken into account as a matter of fairness in taxation. If somebody (this is true for my mother) bought a house for $10,000 in 1965 and sold it for $350,000 in 2018, is it fair to assess capital gains taxes on the entire $340,000, when in fact she cannot purchase a similar home in 2018 for less? If her costs of purchase aren't indexed to inflation for income tax purposes, she is being penalized for long-term ownership. Even with the bulk benefit of Mnuchin's proposal going to the super rich, I'd rather see capital gains (and pensions and all other calculations made over time) indexed to inflation, as part of a package of an offsetting rates increase or new taxes, than continue an antiquated system that isn't fair. What we need are revenue-neutral carbon and/or pollution taxes, taxes on wealth (as proposed by Thos Piketty) and perhaps heavy progressive sales taxes on consumption of goods and services beyond what's necessary for basic enjoyment of life.
3
She would not be taxed on the $340,000 profit. She would be taxed on $90,000 of profit since there is a $250,000 exclusion on the profit from the sale of a principal residence. If she was married filing jointly there is a $500,000 exclusion and none of the profit is taxable.
3
Citizen's United needs to go. Enabling unlimited donations by the rich results in unlimited influence/control of government by the wealthy. What do the wealthy want? More wealth - and in order to stay in office, congress and the administration provides it for them through massive tax cuts. As a result the rich give more to political races ensuring loyalty to their needs by the government, resulting in even more financial benefits more accrued wealth and more influence. It is an endless and vicious cycle that has to end.
5
Hello… anybody there at the FBI White Collar Crime Division? Here’s a gimme. From the FBI’s website:
“… white-collar crime is… synonymous with the full range of frauds committed by business and government professionals. These crimes are characterized by deceit, concealment, or violation of trust… The motivation behind these crimes is financial—to obtain or avoid losing money, property, or services or to secure a personal or business advantage.
“… The FBI’s white-collar crime work integrates the analysis of intelligence with its investigations of criminal activities such as public corruption, money laundering, corporate fraud, securities and commodities fraud, mortgage fraud, financial institution fraud, bank fraud and embezzlement, fraud against the government, election law violations, mass marketing fraud, and health care fraud. The FBI generally focuses on complex investigations… where the FBI can bring to bear unique expertise or capabilities that increase the likelihood of successful investigations.
“FBI special agents work closely with partner law enforcement and regulatory agencies such as the Securities and Exchange Commission, the Internal Revenue Service, the U.S. Postal Inspection Service, the Commodity Futures Trading Commission, and the Treasury Department’s Financial Crimes Enforcement Network… among others, targeting sophisticated, multi-layered fraud cases that harm the economy.”
Hint: Trump, his cabinet and (R)’s in Congress.
2
What is often passed off as chaotic policy making might actually be a well-considered strategy on Trump's part. Between the acquiescent Congress, the movement of the judiciary (including the Supreme Court) to the right and the growing fatigue of the Resistance, he may very well be betting that, eventually, one of these seemingly radical and "dead on arrival" proposals may actually make its way to being enacted.
Once that happens, we will be on an extremely slippery slope where precedent will become less and less important and we will be more and more subject to the whims and fancies of the President.
3
What do you call a democracy where whoever has the most money wins? Failed. That's what you'd call it, and ours.
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Chicago Guy--...and becoming Rogue, as well; soon a bona fide banana republic.
@Chicago Guy I can think of a few more appellations, such as Kleptocracy, Plutocracy, Oligarchy, and so on.
I am a retired CPA with a Wharton MBA and a Masters of Taxation.
There is an economically sound argument for a preferential rate for capital gains. The simplest example is the current situation with interest. Banks pay interest at a rate below the inflation rate. The real rate of return is negative, the tax systems computes tax on the nominal income not real.
If capital gains were to be taxed at the ordinary income rate but adjusted for inflation, it would be a move to fairness. Adjusting for inflation and retaining the current capital gains rate would be double dipping.
If you are interested I could supply some simple spread sheets that illustrate how this works.
There is no question that Trump and crew are distasteful, but on this issue they are right.
5
Well, yes and no. The call to allow inflation to be included in capital gains calculations is sound but at the same time, they aren’t moving to eliminate the preferential tax treatment of capital gains.
As a theoretical point, taking the impact of inflation out of capital gains taxes has some appeal. Effectively, the way in which the impact of inflation is taken out of capital gains today is by giving capital gains preferential treatment over ordinary income. This preferential treatment comes in two forms, (1) a significantly lower tax rate and (2) the ability to deffer the tax payment until the underlying gains are no longer at risk and the gains are realized. Without considering these two significant advantages, reducing gains by inflation amounts to a gift to those with appreciated assets ( largely the the rich ).
2
So why was it again that the Trump administration doesn't want this to go through even a Republican-controlled Congress? Gee, might it have to do with the poor optics of gifting the wealthy in an election year? Or perhaps Republican legislators fear getting in a bind when they contribute to the deficits they decry?
And, for the record, what did Trump say about President Obama bypassing Congress?
372
A lead balloon.
1
It is clear what will be in the next tweet storm: The NYT and other media who report this looting of the treasury are the "enemy of the people." The adoring crowds on the perpetual campaign trail will boo the media for reporting the intended heist.....How dare the media are unrelenting in spewing "fake news" about the great leader who is motivated by pure patriotism to Make America Great Again? Shut them all down! They demand; to which the great leader responds -- "We'll do just that. Just watch."
3
Remember Milton Friedman, a Nobel prize winner in Economics, who claimed that capitalism and freedom were co-equal (or some variation of it)? That is just not so, as freedom towards a lofty goal is not equivalent to self-enrichment at the expense of the majority, the latter being the license to 'screw' others in the name of greed. This is what is at stake now, republican's god, Avarice, trying to gain the upper hand. This is what happens when we have an unscrupulous president, and another crook under his command, Mnuchin, trying to sneak thorough a measure 'to prove' how dishonest, and indecent, one can be, when allowed to abuse their power.
1
@manfred marcus Capitalism is the expression of economic freedom. That economic freedom has done more to reduce poverty in the world than any other economic system ever devised. I am no Trump fan nor did I vote for him, however, mislabeling capitalism as an evil is just incorrect and historically inaccurate.
3
@John I understand your qualms. But for capitalism to serve people, some regulation must be exercised so that the inequality it engenders (and I understand that we are equipped differently with more or less talent, and added sacrifices and dedication to make things work, hence, deserving of a better life) won't be so extreme as to defy it's very existence. Capitalism ought to have social value for the common man as well, not an instrument for the 'rich and powerful' to screw the rest...just because it can (greed is an abomination, with no redeemable virtues). At least, that is what I think. Moderation in all things, and the exercise of prudence (doing what's right, however difficult).
The very same freedom that allows a high achiever to amass a huge fortune is the same freedom that will allow a million times as many low or non achievers to suffer complete failure. That’s a fact that liberals cannot stomach. Realistically we are not all equally intelligent, erudite, aggressive, informed, pedigreed, attractive, educated, cultured, ambitious nor worldly. In total, that’s what affects our station in life. Deal with it.
And The Lords will offer the country bumpkins infected hovels to live in and gruel to feed on and Chinese clothing and they will love the yoke and approve of the kingship of their One, The Chosen, and will listen to every word he babbles - their Gospel!
3
Keep printing those sheets of hundreds with your name on them Steve and get those selfies holding them with Louise.
1
Boss Tweed must be jealous.
2
1st Tax Cut was enacted just half-a-year ago.
During the month or so leading up to the vote, Steve Mnuchin, Sec. of Treasury PROMISED analysis:
“It will be scored by the joint tax group”
“It will be scored by outside groups.”
“It will be scored by the Treasury department.”
“We have over 100 people working on this, and it will be a completely transparent process.”
The American people waited; and just before the vote, Mnuchin produced "one page of fake math" as Senator Schumer politely coined it.
The reality is that Steve Mnuchin LIED TO THE AMERICAN PEOPLE. Why is he still in government?
For this heist on behalf of the wealthiest, Steve Mnuchin now states “We are studying that internally, and we are also studying the economic costs and the impact on growth.”
Same "growth" unicorn does NOT make it legitimate.
Same "studying it" LIE that Mnuchin hides under.
Whatever the non-violent form of riding Mnuchin OUT-OF-TOWN ON A RAIL IS ... BEGIN! Heat the proverbial tar! Bring the proverbial feathers! JUST STUMPING THE IDEA of this corruption for their cronies DEMANDS PUBLIC REBUKE!
2
If the proposed regulation is patently illegal, why are you lefties in such a dither. My guess is you fear it is such a great idea that it might actually be adopted. Your simple solution is to amend the tax code to remove the inflation exclusion. Good luck getting it through Congress.
2
Mnuchin needs to meet a nun with a ruler who can explain Judeo-Christian ethical concepts to his knuckles.
2
We are not thinking about Trumps conspiracy to defraud the American people and obstruct justice are we! Trump has changed the subject once again.
Less than 100 days to the midterms, Trump is threatening a government shut down and now this rape of the treasury. But this proposed tax cut for billionaires might have waited until after the midterms, thus depriving the Democrats of a powerful message to defeat republicans at the polls as an expression of rage against Trumps protectors and co-conspirators in Congress. Why now?
Trump is feeling the heat and while he will not be indicted according the the rules of the DOJ or impeached while in office he will never be re-elected.
Trump is serious about this ripoff but he showed his cards too early. This tax giveaway means the end of SS, Medicare, food stamps and the entire social safety net plus any rebuilding of our crumbling infrastructire.
We have a minority government and our elections are being hacked by Trump’s BFF Putin. We are not all racists or totally ignorant and the Republican base is shrinking. But now the Democrats have a battle cry.
The fascists and their dupes are not in the majority and ordinary patriotic Americans are and the one thing we can do is make Trump govern for his last 2 years with a Democratic House and Senate and for that to occur we, the knowing victims of this fascist regime, must vote in huge numbers and clean these fascists out of Congress where they are up for election.
2
Such a weak editorial...where is the outrage? Content subservient to soft-pedaled stylistic niceties.
I hope Trump is stupid enough to push this through via executive order. That should prove to even the most fervent Trump supporter that he is scamming the whole nation to his and his ultrarich cronies benefits. Go for it Donnie. Please.
1
@Paul Schroeder
Sadly, I do not believe his supporters would be able to see this for what it is.
@Paul Schroeder
Ah, if only...
I have no faith that his followers will see the light. Even if there is a recession/depression, they will blame it on the Democrats.
1
The catholics and evangelicals in America voted for this corruption and destruction of the United States by climate disaster . They will reap what they sow on earth and in the next life.
The taker class strikes again.
4
Seriously, Trumpers, what more proof do you need that you've been conned?
4
@Zach, the Trump supporters in this comments section appear to think that they'll benefit from this move. They just don't understand that they'll be paying the bill.
"Take greed. Do you know what greed is? It is eating more food than you need, wanting to outshine others at games, wanting to have more property, a bigger car than someone else. Then you say that you must not be greedy, so you practice non-greed - which is really silly, because greed can never cease by trying to become non-greed. But if you begin to understand all the implications of greed, if you give your mind and heart to finding the truth of it, then you are free from greed as well as from its opposite. Then you are a really intelligent human being, because you are tackling what is and not imitating what should be.
So if you are dull, don't try to be intelligent or clever, but understand what it is that is making you dull. Imitation, fear, copying somebody, following and example or an ideal -- all this makes the mind dull. When you stop following, when you have no fear, when you are capable of thinking clearly for yourself -- are you not then the brightest of human beings? But if you are dull and try to be clever you will join the ranks of those who are pretty dull in their cleverness." -- J. Krishnamurti
1
Trump is basically running a ponzi scheme out of the ova.
One word: Disgusting.
2
The Republican argument is give people back their money and the free market will take care of everyone. Well lets see here... the anti-Obama crowd feels he just ruined everything. Since the great recession welcomed him into office, the wealthy and corporations regained their losses and accelerated their gains and widened the income inequality gap. And the common person? Adjusted for inflation, as they say, has gone no where. But Trump and the Republicans have the solution. The wealthy and corporations are receiving windfall after windfall, accelerating the gains and the widening the gap even further. And the common person? Getting none of this. The wealthy have been punished far too long. And the common person....has been taking advantage of the wealthy. And if the average worker gets fed up, just remember... that "cushy" life you feel entitled to is ending. So get ready to shine the wealthy's shoes and clean their mansions, office buildings, and hotels, and pick the lettuce in the fields. Because those illegals, who did that work, are being tossed out. And lots of good paying jobs are not coming back. Because there are millions elsewhere more than willing to work for far less than you. You aren't in their shoes....yet. You need to be willing to accept your station in life...You might just want to look in the mirror and practice your lament: "Brother, can you spare a dollar" (adjusted for inflation, mind you).
3
The peasants have no bread?, let them eat cake!
1
Combined with the earlier tax breaks, 45 is obviously going to bankrupt the country, just like he always has his own businesses, and then go play golf somewhere.
2
You forgot about "national security" as the reason the president can do this, just like the tariff war he has started. Obviously our national security is at risk when we import steel as it is when the rich pay too much in taxes. Does the NYT not understand this? Does Congress not understand this?
Let the emperor do his job, please.
3
Many of the more fortunate Americans have a lot of unrealized gains in the stock market from the last nine years.
is Mnunchin trying to tell us something?
Like it's time to sell your stocks before the bottom falls out?
2
This is nothing more than a smash and grab.
An attempt to loot the treasury before the cops come.
And Officer Mueller is on the way.
3
@Ronnie
It would be up to Congress and SOCUS to block this illegal power grab by the administration. Mueller has no jurisdiction here.
1
The crash will be spectacular.
The crusifixes shall be in the shape of dollar signs.
They will be silhouetted by Wall Street a blaze.
1
Quoting a wag who had a finger on the pulse..."all the big crimes have been legalized."
1
Regarding socialists--the sort of folks who certainly penned this column:
"They don't love the poor, they hate the rich"
--George Orwell
"I don't hate the rich, I don't pity the poor. I think Bill Gates has every right to keep every penny he made and continue to make more. If it ticks you off, go and invent the next operating system that’s better and put your name on the building. Ask your buddy that invented the Internet to help you".
--Andy Rooney.
Somehow, the Left believes, if they could seize more from the rich, we would all be better off. The truth is, the Left's archetype for the (hated) wealthy in our country, is Thurston Howell III, of Gilligan's Island fame--a blue blood with inherited wealth, who has never worked a day in his life. talks through his teeth, and saunters through his mansion in a smoking jacket.
Guys like Bernie Sanders throw out the words"Millionaires and Billionaires" as venom--as if uttering curse words. What he and all liberals fail to understand, is that the most destitute, despotic and evil places on earth, are places where there are no "Millionaires and Billionaires"--Cuba, North Korea, the old Soviet Union come to mind.
The existence of wealth, is a sign of our great freedoms. And as soon as we can create conditions whereby entrepreneurs feel unwelcome, that will be the end of the Great American Experiment.
The wealthy have by-and-large earned it. Allowing them to keep more of their income is not a "Plot". It's America.
3
@Jesse The Conservative, it's Teapot Dome America. It's the Gilded Age, when moguls bought Congress and ran the country.
I don't see how the existence of great wealth is a sign of our freedoms, especially if it's largely inherited. Steve Jobs is obviously not Charles Koch. However, when a handful of billionaires attempts to hand-pick Congressional winners, I must admit that I love our democracy more than I love the mechanisms of wealth creation.
Here's a simple question: the 2017 GOP tax bill is now estimated to cost $1.5 trillion. This move will add another $100 billion to the debt. Trump is running annual deficits of $1 trillion. How do you plan to pay for it? Please be specific.
The more we drain the swamp, the deeper it gets!
3
Is there anything we can do?
I thought Trump was going to "drain the swamp"?
2
Those Monty Python guys were very observant of the Brit Society and now, by extension American society.
This borrow from the Chinese and give it to the rich plan and the previous one, the $1.5 Trillion (how many zeros there, I can't visualize,) is the Dennis Moore sketch, "steal from the poor and give to the rich."
Then we had the ACA debacle but Trump could not let go, so we now have the Trumpian devious plot to attack it from the inside. That one is the Motor Insurance sketch played all over again.
Except the MP guys could not see it possibly happen in the UK because they had the State funded universal healthcare...which we are nowhere close to having, and I am not advocating it, because I don't want to be tarred with "socialist" brush.
Unless there is a Progressive "wave" we are, to put it mildly, in deep doodoo.
2
Could someone tell me whatever happened to all those deficit hawks - you know, the ones who were screaming blue murder when President Obama was in the WH?
3
Thank you for boldly stating what’s really going on here: Massive distraction of those who have been and will be the most harmed with bogus social/racial issues while the true Republican base—the rich—stealthily make the Commonwealth’s assets their own.
Question: Will the last .1%er out of bankrupt America bring the flag? Maybe, but only if it’s wrapped around the gold.
2
What did you expect? Mother Theresa?
Wake up America. Trump and his wealthy elite benefactors ate criminals out to enrich themselves, THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SEEN BEFORE.
3
That’s a really scary headline. It reads like capitalism is wrong. It seems McCarthy may have been right!
2
Yes highway robbery is illegal, as is robbing the U.S. Treasury. But that doesn't deter the Grand Old Plutocrats of MAGA, Make America Greedy And...broke.
3
@Christy Keeping your own money is not robbery!
Revolution lurks where gap between the rich and the poor widens. But these would be kings are so entwined with self I,portance and greed that they chose to keep eating cake. They have abandoned their consciences, if they had any. In fact I believe they do not care if the poor die. That may very well be factored into their larger scheme as a cost saving measure. Tell this unconscionable news to Polk County, Tennessee where hospitals serving the poor have had to close and its employees have lost their jobs. These gold encrusted narcissists reek. Vote in November.
3
I'm just thrilled that Mrs. Mnuchin (nee Louise Linton) will now be able to purchase and brag about even more expensive clothing and shoes.
But, I'm guessing she's not a purchaser of the Ivanka Schlock Brand.
Heaven forfend.
NOT my president
4
Hey, come on America, lay off the rich. Providing the rich ruling class of America like Trump and his gang is how we will Make America Great Again! You guys just don't get it.
Iceberg!
1
It is so painful to see greed overtake this country when so many people are working so hard for so little.
3
It’s incredible how much Trump’s supporters are willing to be played for the privilege of “owning the libs.” They’re going to own us so much they’ll get to borrow money (at predatory rates) to bury relatives who died from treatable conditions due to lack of health insurance. Take that libs!
3
It's called the kleptocracy. They already had a $1.5 trillion "bank heist" under the guise of tax reform leaving the Treasury bare. But never satisfied, they're back for more while "The going is good." Just when you missed Tom Price and Scott Pruitt, Steve Mnuchin arrives to say "What me worry" greed is alive and well here among the crookediles in the swamp.
2
Yes- he's yet another corrupt crook in this administration.
1
Suffice it to say that for every dollar saved by the ,001% the rest of us will eat squirrel as recompense. Not one or even .001% of Trump’s Cabinet gives even a .001% care for the well being of the remaining 99.009% of us. And if you take it further, not 10% of Trump’s base give a hoot about anyone other than their own cohort. Most of us are simple cannon fodder to the appetite of Trump’s elite. My intestines are in revolt!
.
2
Please remind me: Which swamp did Trump pledge to drain? Certainly not the one he's engulfed in.
One thing that impresses me about the Trump administration is the wonderful lack of corruption.
1
When are seniors going to get their "inflation" bonuses?
2
If Harbaugh is confirmed, the 5-4 conservative majority in the Supreme Court,beholden to Republican monied interests, will no doubt rule in favor of the Administration.
Call your Senator. Do not let the Republicans railroad Harbaugh’s confirmation. And vote on 11/6 to overthrow the Republican Senate!
It’s Kavanaugh; not Harbaugh.
Maybe this money should be used to build "the Wall"
2
Trump’s appointees to the Federal government, like the “synchophant” Treasury Secretary, are more like the “new” Republican Party apparatchiks we know populate the Soviet government’s machinery. Another form of collusion?
Somewhere between their selection and their oath of office they forgot their vow to protect the “public health and welfare!”
So sad!
3
Illegal - not with the upcoming corrupt supreme court - its will officially be a 100% kleptocracy.
My, how these people surely do love their money.
1
For a long time now, "the problem" has not been determining what these people are. We know what they are. It is beyond obvious. The problem is all the people to whom it is not obvious, because they are willfully brainwashed by Fox news and hate radio.
2
So no surprises here then. Just completely disgustingly predictable. The Repubs have turned into a caricature of themselves and are just fiddling while Rome burns. Eventually the fire will consume them too, but they are too greedy to see it, or they don't care.
VOTE THEM OUT. ALL of them.
3
My profound thanks to the New York Times for holding the Administration's feet to the fire one more time.
1
"No need to subject this process to the messiness of the legislative process when it is so much more efficient to claim jurisdiction for oneself and change the meaning of words to suit one’s purpose. Behold Trumpian logic at its purest."
Well, "purest" does fit, grammatically. But "Trumpian logic" seems to cancel out the concept of "purity", doesn't it?
And not a single living, breathing, sentient human being is in the least bit surprised. This is what these folks do, while exhorting crowds to ‘Build The Wall!’ and get in touch with their inner racist.
It’s what happens when democracy begins to implode.
Wealthy = illegal = cronyism = republican. Quite the proven mathematical equation.
1
What I seriously wonder is whether if the language used here, if it were used back during the election, would have made the difference. You know what I mean, calling a spade a spade, so to speak. Your headline "Trump's Crony Capitalists Plot a New Heist," has inspired me to think this through.
Examples like your headline which comes out and says plainly that the Treasury secretary is planning to divert (steal) as much money as possible from tax receipts and give it to his wealthiest friends through a tax scheme. But that didn['t happen before the election.
So in the election it would have been, for example, Trump promises the Russians something in secret meeting in Trump Tower which he denies. Or, Trump pays off prostitute, porn star and Playboy bunny to keep their stories of sex with him out of public eye before the election. Was it a violation of election laws? Or, What evil deeds lie hidden in Trump's tax returns?
All I can say is I am disappointed with the failure or misuse of the power of the press prior to the election. And thanks for belatedly waking up.
1
If they’re stupid enough to vote for him and stupid enough to continue to support him then they won’t even notice their pockets being picked over and over again by the oligarch billionaires that run America now.
2
What percent of the swill go to the coal miners?
3
Perhaps they are just grabbing as much loot as they can before Trump is forced out of office. Despots tend to like to loot the treasury before leaving in the middle of the night.
Capital gains taxes are supposedly levied on realized gain in the *value* of an investment.
So, NYT Editorial board, please explain how inflation equals value.
Oh, right. You can’t, because it doesn’t.
3
Don't forget that this tax windfall will largely benefit real estate investors. Emoluments for Trump anyone?
2
@Eero
The special tax treatment for real estate developers in last year's tax bill is more like an emollient for Trump than an emolument. ...
1
There is another perspective. In our privatized economy, private agents build and maintain our infrastructure. The government does it's share of large projects but it is the private citizens, as individuals, businesses or through local government that builds and maintains communities. This is a different quality of life than when the State owns grey housing and grey factories that produce grey cars and grey clothing. If we want to encourage private ownership and maintenance of physical assets, would it be fair and reasonable to adjust the cost basis for inflation, understanding that inflation is an artifact of a system where prices change but value does not. Who benefits and the impact on the economy are separate discussions.
1
@Beaconps, I think it's well established that so-called trickle-down economics doesn't work. The billionaires who benefit most from this scheme aren't going to be investing in our infrastructure.
I think you misunderstand the nature of infrastructure spending. Most infrastructure spending is done by federal and state governments. There's an increasing push to privatize our roads and bridges, and that's certainly Trump's scheme, but the money generally comes from taxpayers, not investors. Privatization tends to be more expensive to taxpayers if you factor in that these highways and bridges charge a toll, so I hope we stay with state and federally managed infrastructure.
The way Trump administration is indulging in the discretionary reallocation and even misappropriation of public funds, and forcing the forced transfer of income and resources from the common strata of society to the miniscule of the filthy rich is nothing short of the public plunder and heist that's worse than the crony capitalism.
4
Indexed for inflation?
What else might benefit from being indexed for inflation?
- Minimum wage for starters
What do we hear from Mnuchin and Co. on that?
- Nothing
10
Surly Mr. Mnuchin and crew are aware of the Justice Department report that put an end the last attempt to pull off this heist.
No, this administration knows its proposal won’t fly, but then again, this zig and zag has taken front page space away from the real issues of today like, Immigration, Budget, Iran, Trade, and oh, let’s not forget Russian meddling in our elections.
So, while I appreciate your concern about this new tax evasion scam, please continue to hammer them with the facts on the
other aforementioned issues.
3
You can almost feel the cognitive dissonance from Congressional Republicans. Do we allow the tax cut that we clearly want, or do we stop it and retain tight control over the law?
1
It's not "almost certainly illegal". It's illegal. Violates the Constitution. Grounds for impeachment. Prison after impeachment because Trump personally would benefit from it.. 'Cost' means what the Oxford English Dictionary, Black's Law Dictionary, and the Internal Revenue Code say it means: the price you paid. In whatever currency you paid.
2
@kdmessmer
It would be totally legal and reasonable for Congress to allow taxpayers to adjust historical costs for inflation.
What's illegal is the Administration's proposed usurpation of Congress's power to levy taxes.
1
Like the recent faux tax relief program I'd like anyone to tell me how Mnuchin's proposal benefits anyone aside from the greedy, self-serving camp that POTUS embraces for his war chest and for the already well-heeled members of his cabinet. Perhaps someone can inform me why anyone needs the incalculable fortunes that the 1% need and will see increased by Mnuchin's end around. Yes, the lying populist president rants and raves to deflect, distract and keep the base from looking at how they are no more than pawns and victims in Trump's very calculated and cruel world. Too bad they don't realize they've been had - stop and smell the roses or better still take a look at that burgeoning deficit and consider the economic future ramifications for our children and grandchildren... or look at your tax return next year and sing the praises for how much better off you are because of those crumbs you got while the big dogs got filet mignon.
3
"...it’s easier to ask for forgiveness than permission." What if asking for forgiveness had to happen from inside a 30 year jail sentence?
Vis-a-vis this and other Republican moves in process, it's time to put these people behind bars. Permanently.
2
This is a Kudlow unicorn. No doubt he pitched it to Trump to get his current job. Trump likes the idea of a whole class of oligarchs beholden to him, just like in Putin's Russia. As long as the Republican party is hamstrung by his "base", they will remain silent. The only way to stop this madness is by electing a Democratic Congress in November. This will bring real legislative oversight of the Trumpists. Perhaps then the "base" will realize how badly they've been played by Trump, just like the folks who enrolled in "Trump University" or bought condo's in Trump buildings.
4
The proposal to adjust the capital gains tax would fall into the same category as the original tax cut - armed robbery in broad daylight. And not a policeman in sight.
8
The income distribution in the USA has steadily gotten worse since 1980, while it has remained the same or better in most of the industrialized world. In particular Europe the poor have gotten a larger share . And it has gotten worse in the USA since the republican tax cut this year. The Richest !% in our country has the highest % of the income during this time.
Maybe democratic socialism as practice in Europe should be considered?
6
@tom What many in the US fail to realize is that European nations are not democratic socialisms. Some are social democracies, but none qualify as democratic socialisms. Additionally, these systems work by having broad, flat income taxes. Virtually everyone pays income and vat taxes. The highest tax rates in the Scandinavian countries apply to middle class citizens, not just the wealthiest. There is a substantial percentage of Americans that pay no income tax now. That will have to change if Americans want the system that the Scandinavian nations have.
I disagree with the executive branch using policy making to get around congress’ role as the legislative branch of our government. This is something that Obama took to a whole new level during his presidency and Trump is exploiting as well. The executive branch should have to live with the laws as written instead of creating their own interpretation through executive fiat.
2
@John
Right on. If Trump pulls an Obama here, there will be nothing to prevent a future President Warren or whoever from doing as she pleases.
1
For Trump to carry through with Mnuchin's machinations would merely bring America yet another step closer to a violent revolution pitting the 90% against the 10%. I believe there are more than a few of those in the 10% who are less attached to their money bins than are the Scrooge McTrumps of those even higher up the food chain. We haven't heard from Warren Buffett on this most recent wild hair sprouting from the Trumpian scalp. If past is prologue, methinks Mr. Buffet doesn't think it a fine idea.
4
Oh for shame ! Don't you folks realise that this will enable a plutocrat like Jeff Bezos to do a bit of trickle down and provide humane salaries and working conditions for his lowly labourers ?
I am always suspicious of any corporate tax which NEVER benefit the majority of the citizens in anyway. ALL for the bosses' pockets !
And some people wonder why the socialists are once again starting to gain considerable momentum in America. How much more of this blatant greed and exploitation are the poor and what's left of the middle class, supposed to endure?
5
Take everything you can while you can.
The new slogan the Democrats have been looking for will be .
Tax the 1% at 90%
We vote for the 99% 100% of the time.
6
Because we have such a budget surplus that we can afford to cut revenue even more. Winning!
2
When I first read the lead-in, I thought surely this was an Editorial about the real heist: the new, nearly $1 Trillion dollar record debt issuance (since the last "heist" in 2008 when the Bush Administration raided the Treasury in its final days of office) being led as well, by the Treasury Secretary (a rather cynical misnomer). It is a simple accounting however when one examines the new Pentagon budget for the upcoming Iran war. This is a disguised "war bond" issuance, which is also troubling due to the Treasury Secretary's conflicts of interest with foreign states in the Middle East, eager to see Iran disabled (he not long ago returned from a taxpayer paid trip to Jerusalem celebrating the new embassy, an interesting priority for a US Treasury Secretary). Crony capitalism indeed. Surely this is illegal?
6
@Matt Andersson
In order to prevent the Bushes and Obamas and their ilk (both of whom doubled the national debt during their watch) from saddling future generations with their deficit spending, we need an effective Balanced Budget Amendment that empower and requires the president to selectively impound whatever spending is necessary to stay within a national debt limit that can only be raised by a supermajority in both houses.
Unfortunately, the recent Republican BBA proposals have no such mechanism and hence would result in a fiscal trainwreck. For details, see my "Balanced Budget Amendments, Good and Bad," at http://blog.independent.org/2013/08/25/balanced-budget-amendments-good-a...
2
So, adding $1.5 Trillion more to the debt over the next ten years isn't enough. Increasing the deficit to give a handout to the 1% isn't enough already, Trump wants to (once again) double-down on stupid and hand out another $100,000,000,000 to his wealthy cronies. 67% of this tax cut going to the 1%. Why, pray tell, did all those coal miners, farmers, and white working class people vote for Trump? Oh, "white"... I understand now.
9
If they do this move the Democrat should eliminate the special treatment on capital gain and dividend; quick simplification, all revenues on the same level!
@yves rochette
In order to put all income on the same level, the corporate tax would then have to be eliminated altogether.
IMHO, there's less likelihood fo some income slipping through the cracks untaxed altogether if we grab half the tax at the corporate level and half at the individual investor level, calculating the rates so that the maximum marginal burden is the same on corporate income, pass-through business income, and skilled professional income.
2
The end game is the destruction of Social Security and Medicare.
Nirvana!
4
@David Henry, bingo! In fact House Republicans released a budget in June that would make deep cuts to Social Security and Medicare and transform the nature of Medicaid:
https://www.denverpost.com/2018/06/20/medicare-social-security-cuts-budget/
With this cadre of capitalists that we have allowed to run our administration, there is no better time than now to get a bigger piece of the pie. Mr. Mnuchin and the rest know they'll not be in power too much longer, but they also know Republican's have appointed thousands of right wing federal judges who may actually allow acts like this robbery to stand. In Mr. Mnuchin's mind, the time is now. No question. Grab every little penny and get rid of any regulation you wish. Congress won't question it, and the courts may battle it out for another generation. That's a win, win for this money grubbing bunch.
4
Besides being daft, the proposal is also deeply cynical. Word of this idea emerges just months before the mid-term elections. You can only assume from the timing that the Trump regime figures that the base is incredibly stupid, on the one hand, or that the Trump regime is giving its base — and everyone else except the richest of the rich — the finger.
5
..., apparently there is not such thing as rich enough?
In this, the richest country in the world, being poor is no laughing matter; healthcare is not a human right, a minimum amount of daily food is not a human right and education is not a human right. Despite the fact that this nation could easily provide for that - eradicate poverty and create a unified nation of unparalleled proportion.
To think a nation as such being led by people with a profoundly staggering ignorance of anyone but their own ilk.
What is there to be envious of?
Nothing, absolutely nothing ...
7
I really feel sorry for the poor Americans that still support trump. History will paint them as very very naive. Besides all the things he has already done to hurt them on the very day news broke about this next giveaway to himself and his pals he is at a rally telling all sorts of lies while they all cheer and clap. VERY VERY SAD!!!
12
Robber Barons, hold our beer. Deftly written, with an appropriate touch of snark. If nothing else, the sacking of the Republic has been great grist for editorial writers.
2
When has 'illegal' ever in their lives given pause to Trump's crony capitalists...
The snatch-and-grab has been floated, it's now a question of whether Trump's greedy capitalists will be checked by those tasked with the responsibility...
1
Hmmm, the memory escapes me.
Did the Editorial Board trot out the phrase "crony capitlaists" when Obama was, subsidizing Solyndra and Abound Solar; giving GM to the autoworkers' unions; funneling most of the emergency bailout billions to teachers' and other municipal unions?
THAT'S crony capitalism, giving government, i.e. taxpayer, money to people, NOT letting people--even super rich ones--keep more of their own money.
1
@RLB, in what universe did any of your claims happen? When did teachers' (and firefighters' and police) unions get hundreds of billions in the 2009 stimulus bill? When did Obama give GM to the unions?
Crony capitalism is when the Trump administration drops sanctions on a Chinese telecommunications giant after China invests $500 million in a Trump real estate project in Indonesia. It isn't when a solar panel manufacturer gets a loan guarantee from the stimulus, then is undercut by massive Chinese subsidies to their Chinese competitors. Crony capitalism requires a quid pro quo.
Are you bothered by the fact that Trump's tax "reforms" massively benefit his own family and his donors? Is pay to play okay?
This is a badly formed opinion by the NYT. Every homeowner in the US, not just the wealthy, is subject to capital gains tax when they go to sell their house. If that house was owned for say, 25 years, 75% of the increase in value due to just inflation, and the homeowner will be taxed on that. Is that fair for homeowners to have to pay tax on inflation? I think not.
And consider many middle class Americans who must save for retirement. Most people who save do so by buying stock. Stock increases in value partly due to inflation, so when that middle class American goes to sell that stock for living expenses when he/she is retired, they are paying capital gains tax on inflation. Is that fair?
The Times editorial board is making this issue sound like it is something that only affects the wealthy. That is not the case, many non-wealthy Americans are affected. I am not rich and I certainly believe that paying tax on inflation is not fair.
2
The example you use of a homeowner selling their residence after 25 years and purchasing another to live in would pay no capital gains tax.@Scott Werden
5
@Scott Werden You pay capital gain tax for selling your house if you own it for less than two years, or it is not second home. If you sell your primary residence after you live for two years, there is no capital gain tax. Most Americans do not own multiple houses, and most Americans do not flip houses. So most homeowners will not benefit.
While most Americans save for retirement or others, please keep in mind that buying and selling within your 401K and IRA do not trigger capital gain tax as well. Only if you buy and sell stocks and mutual funds outside the retirement account, you will pay capital gain tax.
The key point is while many Americans will benefit from its if they sell stock or mutual fund the vast majority of it goes to rich Americans.
10
You forget that $250 thousand per each of the typical two owners capital gain write off each get at time of sale. Even if one of the owners recent died, the spouse gets the full $500 thousand write off.
5
Trump, his GOP cabinet, and the republicans in congress have one sole aim and it is to enrich themselves, their families, and their ultrawealthy donors, and to gain and keep power(and the 0.1 percent of the richest keep them in power) to achieve that end. To them, colluding with putin and russia, hacking the DNC, inciting racial tensions, gerrymandering, voter fraud, voter disenfrancisement and voter suppression are 'not a crime'.
They have been selling snake oil-trickle down economics, for decades now. Their base buys it, and the result is 0.1 percent of the wealthiest, almost all white,now control 95 percent of all the national wealth. When they corner all but 0.1 percent of the wealth, their base will still be supporting them.
From its beginning, I've said that the only way you can come out ahead with this administration in place is to be a millionaire. This could be part of the proof.
1
There are at least two solutions : Vote in November to change the Congress or Special Counsel change the POTUS . Any other ideas ?
4
@joseph The answer is to ensure that the President, no matter which party they serve, cannot circumnavigate congress.
3
Every day I wake up to another dish of disgust. Somewhere, I firmly hope, there resides in Washington, a republican leader ashamed of himself and his pitiless party for its collusion in this sad, sad nightmare. This country has been brought low..
6
While I totally agree that Trump’s fake populism is now totally discredited, it is true rich people contribute disproportionately to total tax revenues (I read that the top 1% contribute 40% of all taxes), therefore ANY sort of tax relief will arithmetically benefit them far more than poorer people. For people who pay only a few dollars per year in taxes, tax cuts are largely irrelevant, and it’s not a question of good or bad policy but of simple arithmetics. If someone pays $1000 in taxes, the best he can expect is to pay a couple hundred bucks less per year. If someone pays $500,000 in taxes, all things being equal it’s inevitable that he’ll get a bigger cut. Simple maths.
The underlying problem to be addressed is the vastly unequal distribution of income: all these problems wouldn’t exist if the gap between the 1% elite and the rest of us wasn’t that great (and growing all the time). Perhaps liberals should address the larger policy problem of reducing income inequality, rather than fighting with Republicans about tax policies which simply reflect a post-facto mathematical inevitability.
Mnuchin's "reasoning," such as it is, goes something like this:
Poor people don't own any stocks or houses, so why should they care what I do with their government's money.
I mean, after all, it's not like they should have any say in the matter.
Not many of them are Republicans or Trump people, after all.
The nerve of some people, thinking they have something coming when they don't.
I say, "Let 'em eat cake."
2
What a shame that the wealthy in this country don't want to pay for he very things that contributed to their wealth; roads, schools, infrastructure, and defense to name a few. This is one of the real tragedies of America.
1
We seem to be a cycle where Republicans in power plunder the government coffers to enrich themselves. The George W Bush administration essentially wrote a check to the large corporations involved in providing the trappings for war in Iraq and, at the same time, turned a blind eye to the machinations of the big banks which produced the Great Recession. One could argue that the Obama administration was then compromised in their plans for social change by the immediate need to address the financial problems of the Bush legacy.
Trump was handed a relatively healthy economy by Obama but, here we go again, this irresponsible and greedy President is set on ballooning the deficit while the Republican Congress hangs on to his coat tails. Fast forward to 2020 when the economy may well be headed for recession. Americans desperate for change elect the Democrats who can't begin to fulfill campaign promises because the problem of the dire economy is too great.
Republicans surely know what they're doing.
3
When do the wealthy have enough? More stealing from the government coffers so they can turn around and cut Medicare and Social Security. We are living in a plutocracy. Who will rid us of these demons?
1
The Mnuchin Billionaire Bailout is only marginally worse that the Save-the-Rich tax plan passed by this Republican-controlled Congress.
By simply tweaking a couple Treasury or I.R.S. rules, Mnuchin is saving the country the unpleasant ordeal of listening to hypocritical G.O.P. politicians justify voting to give more goodies to the Americans who least need another sugarplum.
There will be no political repercussions. The Republican Party made a decision a few years ago to adopt policies designed to appeal to a shrinking demographic.
Republican leaders already know that the only way they can win an election is to cheat. Having one more reason to engage in voter suppression, dirty tricks and soliciting help from friends in the Kremlin is no big deal.
1
The sad part is Trump supporters have been deluded by Trump to believe he's working on their behalf.
As noted below, they are willfully ignorant of Trump's deceit.
2
Trump the candidate promised over and over to close the carried interest loophole.
This move is, loosely speaking, the exact opposite.
The only surprise here is how there is no backlash from Trump’s ‘base’ voters.
Trump saying he could shoot someone and not lose his supporters is possibly the truest thing he has said.
It’s infuriating.
3
Just wondering how this latest excursion into deficit spending will sit with the every-powerful Koch brothers, who apparently are having a bit of a change of heart in supporting Trump and his acolytes.
This "$100,000,000,000 tax cut for the mega-wealthy" can only mean that the cuts to social safety nets (Medicare, Medicaid, and Social Security) will need to be significantly larger than the GOP leaders in the House have been advancing since the "tax cut" bill was passed in December.
Will we ever reach a day when the fallout from the "tax cuts" bill will be felt by the "base" whose favor is curried by the Trump administration?
Surely, the overt hypocrisy of the GOP favoring the oligarchs and corporations over the regular working-class Joes who populate his supposed "base" should be apparent by now. We are the 95-99% of the population who are being sacrificed at the altar of greed and power.
The only way to stop this madness is to vote these scoundrel out on Nov. 6th!
So, billions more dollars taken out of the budget meant to support what is necessary for the US to be a civilized society and competitive with the rest of the western world.
Trump supporters are delusional -- they think that Republicans will pave their roads, educate their children, and assist with health expenses. Yeah, right.
We have created a ruling class in the USA -
Donors are spending BIG for political puppets. Koch brothers alone say they are going to spend nearly .5 Billion dollars on the mid-term elections alone. Trump and his administration are obviously willing to pay these big donors back at the taxpayers expense.
Trump is fleecing the American public, taking big money from taxpayers to enrich himself and his political cronies. This should be illegal.
4
Citizens!
Pull together, rejoice in suffering!
The rich don't have enough, so dig deep into your resources, fear not the temporary pain of life in a tent; the yacht must be repainted!
Despair. The mink got moths. The shoes are so last week. The airplane is obsolete! It must be replaced altogether!
It's up to us, my fellow citizens, to donate our savings, our labor, our Social Security checks to the cause.
Make America Great Again!
1
The only cure for what ails us "depressingly cynical" types is mobilization of the 99% to get out and vote for Democrats in November. This Trumpian madness will go on until it does not work. To borrow a phrase, we need to help it into the dustbin of history.
1
There is a cynical and cruel pattern here.Reward the wealthy and then reward them again.In the meantime destroy the safety net of health care and punish asylum seekers who seek to come to our country.You produce a privileged upper class to support your aristocracy and throw crumbs to the peasants.This is not America-let's not pretend that this takeover of our Democracy can be tolerated.
2
Wouldn’t the Seacretary of the Treasury and Trump himself be major beneficiaries of the proposed change? Whether or not the proposal is illegal,there’s a special place in Dante’s Inferno for this kind of greed. Among the features of greed as a moral failing is that it knows no limits. There is never enough to satisfy it. In this, it shares qualities with tyranny—that is with the boundless desire for more and more power and the domination of others. There’s a lust for domination. The more we see of Trump and his cronies, the more we’re justified in thinking they suffer from this soul-destroying disease.
1
We can't seem to get a handle on how to deal with all this, can we? The destruction of our government, the blatant thievery of our Treasury, erosion of our protections. A vague "Lock him up!" sounds good, "Lock THEM up!" even better, but how? We need to untangle this mess strand by strand.
Vote out all Republicans, who precipitated and enabled this mess. Then we can get to work on the rest of it, if it's not too late.
Trump and his coterie of creeps have gotten away with so much already, why not keep pushing it? When you've got the people most hurt by his policies, and those most to gain from them, singing along together; and support, or anyway lack of resistance from, other branches of government -- full speed ahead!
I believe if you sell your home and reinvest the money in another home within two tyears, you do not pay any capital gains tax on that sale.
This is what middle class people do, because they need a home to live in and can only afford one. This rule will not help middle class voters at all. But the deficits will hurt all voters. Deficits increase the cost of mortgages and other loans, slowing the economy. That will lead to job losses, loss of public services, etc. This is a terrible idea, cruel, selfish, swampy, and illegal.
1
It's not just Trump. The GOP today stands for nothing. It has become just a party of looters and pillagers of the Commons -- the national treasury, the environment, education, workplace safety, healthcare, our roads, bridges and infrastructure -- stirring up hatreds and distractions so they can make off with the goods while the getting is good. What America needs is a good decade or so of positively punitive taxation of the rich and corporations, a massive claw-back, so they don't bankroll this kind of politics of theft again any time soon and think they can just get away with it.
1
Take from the poor...give to the rich. Great gig if you can get it. Whey we are all not in the streets now on a daily basis remains a mystery.
What next--no taxes at all for the rich? That wouldn't surprise me at all with Trump in the White House. His removal is needed more urgently than ever.
1
Let's see, the Trump administration has implemented tax cuts that will balloon the deficit to over $1 trillion this fiscal year. Future deficits will be larger (absent the social net spending cuts discussed in many postings). The government will need to borrow this money, driving up interest rates. Paying off the idiotic loans used to pay for the Iraq fiasco, to say nothing of deficits related to the Great Recession, gives the government an incentive to inflate the $, just as we paid off the Vietnam debts by inflation-driven devaluation in the late 1970s and early 1980s. As inflation rises to 4%, 5% or perhaps even more, the ultra-rich, who hold so large a share of our capital assets, will want protection from the effect of inflation on those assets. Mnuchen's (illegal) proposal would provide that protection. If the Democrats win control of either chamber in November, we might expect to see the Republicans in the rump Congress try to reduce the capital gains tax, beginning with the 3.8% surtax that is part of Obamacare. The real war here is between the 10-15%, who get almost all of their income from salary, and the 0.5%, who get their income from capital gains. Most of the the former live in the coastal blue states: they got the shaft in the 2017 tax bill. The Republican strategy is to target the salaried group for tax revenue and the poor for spending cuts, so that the capital gains crowd can benefit.
This is a blatant heist by the Trump mafia of whatever future may lay ahead for our kids.
A ballooning deficit they are going to have to service with ever increasing interest rates ,inevitable cut backs in Federal programs as healthcare costs increase,the infrastructure rots ,our education lags the rest of the world.
TheDemocrats need to ensure the electorate know of this irresponsible proposal and the greed attached to it.
1
How a ruler, in this case one that was voted into office, can turn in an almost sadistic way against the poorer classes while giving bonbons to those that already have is just INCREDIBLE in the 21st Century.
One could understand such an affair while reading a fairy tale book or one about history. But to plunder the State's coffers is now as then a crime, understand it well: IT IS A CRIME.
Where are the courts to fall in Trump's arm to stop him? Here is action needed, when the State is in danger!
The US Dollar is currently worth 1/3 of what it was in 1985 based on published, planned inflation of that currency. I purchased BD stock in 1988 making the money I purchased it with 3X more valuable today. So, the editorial board claims it is unreasonable to: a) recognize the planned destruction of the US Dollar by the Fed over time, b) recognize the tax consequences of that planned destruction in long term stock investment holdings. Really? Are you guys really not able to piece together a rational analysis supporting indexing capital gains tax receipts on long term stock holdings to inflation? Does that mean we do away with SSD payments to old folks indexed to inflation?
2
The economy needs another stimulus. The rich need cuts also. It is called trickle down. It works. Cut baby cut. That was on the ballot. Elections have consequences. Trump won. Deal with it.
@Steve, Trump concealed his true goals from his supporters. He told them he would protect Medicare, Social Security and Medicaid, then proceeded to push a 40 percent cut to Medicaid in his ACA repeal bill. Trump promised to give his SUPPORTERS tax cuts; he promised his tax cuts wouldn't benefit the rich.
None of this was on the ballot. Many of his voters thought he cared about them. He lied.
Everyday the drip drip of indecency, incompetence and stupidity from this administration continues to undermine the constitution. Not that the republicans in Congress, who have used the constitution repeatedly like it was the WORD OF THE LORD when it fit their needs, are willing to stand up and DO THE RIGHT THING. The whole thing is a horrible farce.
1
Every reputable economist is not confused by nominal versus real changes in prices. The tax code already takes inflation into account by, for example, indexing the various levels of taxable income at which the marginal tax rate changes and by indexing personal exemptions and the standard deduction. Once the purchase price of an asset is properly adjusted for inflation, Congress can then eliminate the lower tax rate that capital gains enjoy relative to other forms of income. In the past, apologists for lower capital gains tax rates have argued that the lower rate compensates for inflation, but the lower rate applies whether an asset is held for one year or fifty years, which hardly makes any sense. Just because Trump suggested the idea is no reason to dismiss it out of hand.
2
“Fans of the move argue that it would benefit the wide swath of middle-class Americans who own stocks…” Most of these stocks are held in 401ks, IRAs, and other qualified plans which are not taxed until distributions are made. When distributions are made, they are taxed as ordinary income not capital gains. So how does this tax plan help them?
“…along with all those older Americans whose homes have appreciated in value over the decades.” These transactions are eligible for a gain exclusion of $250,000, $500,000 if married filing jointly, as long as the home was owned and used as a personal residence for at least two years. This exclusion should be enough to offset the gains on home sales by middle-class Americans in most locations around the United States. So how does this tax plan help them?
1
There is one element of common economic sense to this proposal. If one earns a 2% annual return on an investment and inflation is 3% during that time, then one has lost purchasing power and fairly shouldn't be taxed on 2% "profit". However, should this proposed change is made, then capital gains should be taxed at the same rate regular income. That said, it is obvious that a "fairness" argument in this case is only a cover story for a giveaway.
1
It would be so much easier, and so much more egalitarian, to simply expand and extend the tax cuts for average Americans. That, however, would require an administration that actually cares about them.
2
How about if wages were pegged to inflation, and employers had to, at a minimum, increase worker’s pay as inflation increases. A (hypothetical) 50k salary negotiated in 2012 sure doesn’t go as far in 2018, but this populist president sure doesn’t care about that.
2
Another hundred billion after the $1.5 trillion tax cut that we can't afford. Most of it channeled to the uber wealthy who have already been the big winners over the past 25 years of globalization. Let the jungle of income inequality blossom even more.
This, while we have so many unmet needs as a society, from health care and education to infrastructure and climate concerns. These are not liberal giveaways, but investments in the future. A modest sacrifice to invest in coming generations.
But no, greed is the big winner in America these days. We are not sacrificing for the future but robbing from it. Giant tax cuts for the rich which will have to be paid for by selling more Treasury bonds to the Chinese. And our children and grand children will have to pay for it, jut so today's one percenters can buy another yacht or cottage in Provence.
It's intergenerational larceny. Morally bankrupt policy run by a governing kleptocracy for the elite. A day of reckoning is coming.
8
Great news for long term investors especially elder home owners who are selling. This should benefit those that saved and invested wisely which I thought our society desired.
@JoeGiul, how would it benefit seniors selling their homes? There's already a $250,000 to $500,000 exclusion on profits earned from the sale of a primary residence. They don't benefit from this change.
The top 0.1 percent is not composed of those who "saved and invested wisely." It's composed of inherited wealth, like the Waltons, the Kochs, and the Trumps.
All economists agree on one thing, the tax cuts that have the most boosting effect on an economy are those given to the middle class and people with low incom. The reason is that these types of cut will actually increase spending while tax cuts to the ultra rich will not as they can already afford everything they want. That is why it is so mind boggling that conservatives always prioritize tax cuts to the top income strata of society. The same thing happens in Norway. As there is no scientific rationale behind the action the only conclusion obvious to me is that they do it in order to pay back the people that got them elected. Is that not the very definition of corruption?
5
When Republican candidates tout the 4+% growth rate their Democratic opponents should simply ask the voters how many of them saw a 4% increase in their wages last quarter. The economy may be growing, but the increased wealth is all going to the same people.
24
Let us once again return to the Trump dictionary... "Populism" is a form of government that enriches "people". "People" are defined to Trump as "like me". Note that they don't work - "on a farm", or "in a factory", or "in a steel mill" are all acceptable but superfluous suffixes that make the statement easier for non-people to digest.
So the "surprise" at Trump's desire to reward his cronies is yet another example of "fake news".
5
How readily the Trump supporters embrace increased debt in support of making the rich richer. If Trump calls such a change in taxation of capital gains good for the economy, his supporters will applaud him, no matter if it decreases federal income and thereby increases debt. One would think that the better, more prudent course in terms of helping out the average American voter would be to charge FICA on capital gains and eliminate the FICA limit, not to further reduce the income tax of those most able to pay them. But who needs their retirement income protected or the debt reduced as long as the President is "making America great again?"
16
84% of stock are owned by the top 10%. And the vast majority of stock held by middle class households is in retirements accounts, which are not subject to capital gains tax. This is a giveaway to the top 10%.
24
This is what there Republicans have ALWAYS been about. The tax cut for major corporations and wealthy people is their only major success. That Trump supporters consider Trump and his Party populists is the biggest con of the century in American politics.
13
Sure, I'll go along. Go ahead and index long term capital gains. But raise the rate on short term capital gains to 25%. And micro gains - things you held for less than a month to 80%.
I'd be fine with rewarding long term investment as long as we equally look at the huge amounts of market gambling, and fast turnover churn.
And while we are at it, let's just change the capital gains rule, by fiat, on buying a viable business, selling it for parts and shipping the jobs overseas. Tax the destruction of a business by vulture capitalists at 90%.
And then, when all of that is done, maybe we could get Betsy De Vos to index FAFSA for cost of living, so that people who live in areas that cost 1-2X the national average could get by without paying their whole retirement to schools.
Yeah, yeah, I know. Long ago in corporateland, we called all this a "two peyote button" plan. That was approximately the amount you needed to believe the plan could be real.
16
Mr. Mnuchin, like Mr. Trump grew up in an extremely privileged, rarified environment. His father was a Goldman Sachs partner for many years-before he "retired" to become a powerful New York Art dealer. I worked for his parents for approximately three months in the 1980's.
His stepmother was an extremely savvy businesswoman, hugely successful in her own right at a time when women were considered to be better off at home. If I had to guess, she was probably Ivanka Trump's role model.
I will NEVER forget the day( circa 1980's) when I was in the Mnuchin's Park Ave. building's elevator. Their unionized building staff were on strike, because the raise they had sought was not forthcoming. Mrs. Mnuchin, annoyed by the lack of services she had been accustomed to, turned to me, saying " Just who do they think they are, anyway?" I was so stunned, totally unable to respond.
Looking back, I realize that I was repulsed by the woman's haughtiness. The incident turned out to be a huge factor in my quitting that job just a few days later. Those were the days when household staff were not forced to sign confidentiality agreements. I could say a lot more, with impunity. I think this explains Mr. Mnuchin's egregious behavior, his determination to use his position to reap as much money as possible at the expense of ordinary hard working citizens. Like Mr. Trump, this family has a horde of lawyers and accountants who are paid handsomely to use every possible loophole.
67
"But the Trump administration isn’t one to fret about legal niceties when pursuing its pet projects. It much prefers to plow forward and let the court challenges shake out as they will. You win some..... You lose some."
It may be "pure genius" to fatten their personal coffers further, but it makes zero political sense.
Another windfall for Democrats in the form of winning arguments against the tremendous greed of this corrupt administration--but will they see the opportunity and capitalize on it?
10
It's not just the pure greed of the "immediate" tax cuts for the ultra wealthy at stake here... indexing capital gains to inflation means that the wealthy will never again care about rampant inflation. This is not just a simple tax cut for the rich, this would be a profound, and profoundly disturbing, adjustment to the entire financial system. Working peoples' paychecks would be worthless, and the rich would be completely unaffected.
20
Specific examples would be interesting rather than trash demagoguery.
Since Americans own homes for decades, and stocks for relatively short periods of years, I would like to see facts.
Further, those who hold stocks and benefit most from indexing are older Americans living on dividend income. Most of the article’s examples likely have held stocks in the recent past when inflation has been low or totally absent.
But don’t let that get in the way of your screed and tribute to envy.
2
@Stuart
Maybe we should encourage actual home owners by targeting them for this tax break. We could give the
inflation break only if the seller of a home had lived, say 10 years, in the same home. Stock owners and house flippers would be eliminated. We might add a sale price limit to make sure the money goes only to the middle class home owner.
@Stuart: Read the article please. Ample facts about how very much of the gains go to the ultra-rich and how very little to common Americans. How many of those common Americans can afford to live from dividend income? And who are you or I to dispute the 23- very detailed opinion of the Justice Department's Office of Legal Counsel explaining why the Treasury Department does not have the legal authority to do what Mnuchin wants?
2
Those stock dividends you speak of that are the bonus for retired well to do eventually ends up in the hands of their heirs. Those that inherit don't work for their inheritance and not having to pay capital gains will just make them that much more well off without lifting a finger.
Fine, we live in a capitalist economic system and Democrats and Republicans support that system. But at least acknowledge that those who are born to inherit have an unearned advantage.
The government should not so starve its coffers that it has to take away the supports that help others without an upper middle class to .01% start in life move up and succeed in this country. Think, if those lazy people on welfare and flipping burgers had all had daycare as youngsters and excellent educations with living costs subsidized, they could be adding at least twice as much to the country's real wealth.
True GDP, not just the puffery of tax cuts, grows when the most people possible are productive.
4
Reflecting on increasing the wealth of the already wealthy and the increasing temperatures and the wild fires world wide: California, Northern Ontario, BC, Greece and apparently Asia...smoke coming from Asia; does trump not worry about fires affecting his widespread world wide holdings or increasing temperatures making them non liveable. What about rising seas? All the secret loans in the world will not aid those conditions. One would think rational beings would want to ameliorate those conditions. Parts of India are approaching nonlivability and I remember about the time of the drumpf inaugeration his spawn were in India scooping up deals. The wheels of fate grind exceeding slow but they grind exceeding fine..or something like that. To quote another cliche trump's chickens may come home to roost. In other words manipulating capital gains may mean squat.
3
@bcer, good points. Trump, unlike his base, realizes that climate change is real and that it threatens his holdings. The Trump Organization has petitioned the Irish government to let them build a sea wall to protect their Irish golf resort from rising seas.
Look at the appointees to the courts. Will our current roster of judges have any problem with this scheme?
8
The real reason for this move is the realization by the plutocracy that the tide is running against them and that this is their final chance to get their gains out.
And the plan is a daring daylight robbery: The Treasury will by its fiat decree that "cost" must be adjusted for inflation. The rich will then sell off their appreciated assets for far less tax (even at the 20% rate) than they otherwise would pay (of course, they could have waited and gotten the stepped-up basis at death for their heirs).
If several years later the courts find this was not proper, and the Democrats are then in power, they will have the unenviable choice of either ratifying the GOP plan by legislation or seeking to recover the $100 billion by lawsuits (and you can see the Fox News rage already for that option).
8
It is fair and makes sense to take into account inflation when calculating capital gains.
What seems unfair (to me) is taxing capital gains at a lower rate than ordinary income.
I think that capital gains should be taxed at the same rate as ordinary income; however the amount of any capital gain (or loss) should be inflation adjusted.
4
We have tax policy totally backwards in this country. The money you actually work for, specifically wage income, should be the least taxed while un-earned income, capital gains, should be taxed at a greater rate. Further, subsidizing losses by allowing offsets to actual taxes owed is ludicrous and burdens the vast majority of Americans with covering the bad bets made by speculative investors.
Basically, if you worked for your money, great, your personal contributions to society are appreciated by all and you get to keep most of your income, let’s say 90%. If your money worked for you, we hope you appreciate the opportunity that we gave provided to you to live in a great country that allowed you to earn money without your actual working for it. Thank you for contributing a higher percentage of that unearned income, let’s call it 30%. If you lost money, we feel your pain but it’s your pain, not ours. Better luck next time.
18
@Medium Rare Sushi.This makes so much sense we could never do it! At least not while the wealthy buy our legislators.
1
Why would your u risk your capital?
@KJ mcNichols, to make money.
Thank you, New York Times. Keep up the excellent work of informing our citizens of this administration's actions, gaffes and blunders. Long live the resistance!
7
If it is legal to index Social Security Payments to inflation, which is currently done every year for old folks, then, how can it be illegal to index anything else reasonable, like capital gains, to inflation?
2
@Michael: It is not in itself illegal, because Congress can approve it, but it is illegal for the Treasury Department to do so as a regulatory matter. Munich however, wants to bypass Congress because he expects they don't want to approve it.
1
Congress is responsible for taxation and tax laws. The president isn't allowed to change tax laws according to his latest whim.
3
This is far, far worse than it looks. I can see this tax dodge being used to prevent any taxes from being paid by the very rich. Why? There is nothing in this proposal to preclude the cost from exceeding the sales price and generating a tax loss.
Right now, if I buy a dollar investment then sell it for a dollar in, say, a year, there is no gain or loss. My sales price and my cost are equal.
Under the new Trump proposal, with an inflation adjusted cost, I get my dollar back and I get, say, a 2.4 per cent loss usable at tax time. My cash is the same either way, one dollar back after a year, but under the Trump proposal, the Government now pays me at tax time.
The next step will be for Wall Street to pre-package these paper tax losses into stable value ETFs or other "structured products" and sell them. "Buy as much as you need to offset your gains, Mr. Hedge Fund Billionaire."
Just my opinion.
10
This is to further put off the inevitable market crash/correction. The market is overvalued - it's ballooned from years of low interest rates set by the FED. Meanwhile, the FED is supposed to do one thing over all others: institute secular disinflation using monetary policy; i.e., fight inflation even if it doesn't exist. It's a Catch-22 at this point.
Is this not a good example of Neo-Feudalism? The lower economic classes financially support the top h
Economic classes.
2
Compare/Contrast:
Obama had 8 years to order his Treasury Department to close the Carried Interest Loophole and then see how it played out in the courts. To promote fairness, fight income inequality, and generate substantial revenue for the Treasury. Many urged him to do it. But he was too timid (and too beholden to Wall Street), so he gave up without a fight.
Trump, less than two years in office, is set to order his Treasury Department to open a Capital Gains Loophole and then see how it plays out in the courts. To promote unfairness, increase income inequality, and generate substantial revenue losses for the Treasury. Many are urging him not to do it. But he is too bold (and too beholden to Wall Street) to give up without a fight.
https://www.nytimes.com/2016/05/08/business/ending-tax-break-for-ultrawe...
2
As James from St. Paul, MN illuminates, the goal of the Republican Party has always been to keep the Federal Government as small as possible, in the belief that private citizens, "business leaders", and local government officials are more inclined and better able to serve their constituents. That may or may not have been true at some time in the past but it is absolutely not true today. In all forms of organizations of people, whether it is a business, a sports team, a charity organization, or a government, the organization reflects the leaderships image, it is a top down proposition. It is a grassroots movement, from the bottom up, that corrects the organizations faults, which usually means a change in the leadership. Today our leaders, business, (including the mainstream media corporations), and government, are corrupted by the pursuit of unlimited wealth and privilege, even when it comes at the expense of the poor and the future of our nation, and this is reflected in the attitudes of the general population. The wealthy 10% of this country are understandably satisfied with the status quo, and the other 90% are completely distracted in the attempt to just survive with the little wealth that is left over for them to provide for their families future and security. It is truly a sorry moral state this country finds itself in now, and I do not know how it is going to correct it's faults without violence.
8
Secretary of the Treasury Steven Mnuchin has determined by some calculation that $100 billion returned to taxpayers will have a greater impact than investing $100 billion in infrastructure or reducing the debt by $100 billion. He suggests carving up that $100 billion according to a formula that allocates 97 percent of that amount to the top 10 percent of income earners. OK, let's accept for the moment that we want to distribute $100 billion.....do we have any other options?
We might start by noting that with approximately 100 million federal taxpayers that $100 billion is $1000 each. Spread over 10 years that is $100 annually. Shucks, not very much but $100 than most of us will receive under the Mnuchin manuver. That $100 annually will provide me with an additional can of tuna each week, along with an occasional bag of rice. Not much but I can take some comfort that Betsy DeVos and I have shared the same improvement in our standard of living. Or perhaps we could use the newly-created Mnuchin Index to allocate $100 billion......establish how much Steven Mnuchin spends to feed himself each year, then allocate 50 percent of that to the lowest income individuals so they can eat half as well as Steven Mnuchin. What would be most fair would be to establish the annual food budget of the poorest 10 perecent of the population and let Mr. Mnuchin feed himself on that, except the Constitution bars cruel and unusual punishment. Yet a diet of soybean cake would help our farmers.
4
It's true that this policy will help the rich more than the poor. But isn't indexing capital gains to inflation fair? Welfare is indexed to inflation. So is pretty much everything else.
Taxing capital gains discourages investment and savings, things that make everyone better off in the long run.
2
@Russell - Capital gains are already taxed at a much lower rate then ordinary income, so no, adding indexing to inflation is not more "fair" - it is just a way to reward the donor class while reducing badly needed revenues.
Also, indexing makes it impossible for an investor to calculate probable after tax returns based on solid assumptions, and provides yet another way that government provided data can be used to manipulate taxes without proper legislation.
12
‘Welfare’ is indexed for inflation? What welfare are you referring to? Do you mean public assistance (TANF, etc) which is not indexed for inflation, or are you referring to social security? If so, social security is not welfare.
2
The adjustment for inflation is actually not unreasonable as long as the capital gains rate was increased so as not to increase the federal deficit. In fact, capital gains should then be treated as regular income (averaged out over a number of years) which is probably enough of a rate increase to not increase the deficit. Throw in an estate tax increase while we're at it.
4
All of these proposals would require legislation. The threat Trump proposes is to rule the country by administrative decree.
3
Since Mnuchin also plans to index the minimum wage to inflation (and also, social security, medicare, welfare and other support payments - some of which may have some indexing already), so what if the rich get richer? At least the poor will get something too (surely this genius also must have plans to train, support and employ those stuck in our prisons at rates seen nowhere else on the planet).
Oh wait, is Mnuchin only planning on indexing capital gains to inflation? He is clever, isn't he?
Well then another way to look at things is this will allow the 0.1% to hire more help. And since they will be paying the help at or close to minimum wage, all those wages will be plowed back into the economy. Presto! We have economic dynamism. Come on "help," get to work and kick start the economy on your backs, as you spend every penny you earn to try and allow you and your families and children to survive. There's a lot more of you than the 0.1%. So let's get cracking (work to be done!).
Stevey already has jump started the economy by allowing companies to repatriate cash held abroad with minimal tax consequences. And look, it's already helped companies pay out dividends and buy back stock so the 0.1% are given the help they deserve.
Let's keep on helping those that have shown they can succeed and reap the economic benefits of their success! This here's America gosh darn it. Love it. Success warrants special treatment. The rest? Well, they just have to figure it out.
8
The Democrats are totally inept at explaining economic policies. Chuck Schumer should be on TV with a pie chart, graphically illustrating the terrible consequences of this proposed change. If this gift to the plutocrats goes through, the US Treasury will lose $102 billion in a single DECADE! Where will the needed revenue come from? Medicare. Medicaid. Social Security. Food Stamps. Housing vouchers.
The social safety net will be rent beyond repair. Can blue-collar Trump supporters really care so little about their futures? Is there no way for the Democrats to bring these economic truths home?
15
That the administration would even CONSIDER the idea shows how divorced from reality they are.
Remember during the campaign when Trump said the US should declare bankruptcy? Looks like we’re headed that way.
I’m starting to suspect Trump knows the end is neigh.
10
It would be a gift of sorts to many middle class homeowners in Blue states who sell their homes. The one time capital gains exclusion of $500k for selling a primary residence doesn't deflect much in the way of taxes for overpriced California real estate.
Once trump realizes he's helping those who would be glad to see him go, sooner than later, he may rethink this.
Aside from the unbridled greed that motivates this ploy, it couldn't be more wrong policy-wise. Giving tax breaks to the wealthy exacerbates income inequality, which eventually leads to revolution. (See Piketty's 'Capital ')
For society to function smoothly and peacefully, we need progressive taxes to lessen income inequality. But Trump couldn't care less about that. November can't come soon enough.
10
Australia indexed costs when capital gains taxes were introduced in the 1980's.
Twenty years later they were replaced by a simpler system of only taxing 50% of gains for assets held longer than one year.
Indexing was a bureaucratic nightmare. The government had to publish price indexes every three months. Taxpayers had to keep exact records of purchase dates which can be difficult for shares which may be purchased over time. They could no longer be grouped. Accounting bills increased as accountants had to complete additional forms, even for small holders.
It seems a strange proposal for a government who wanted to cut red tape.
Nice theory but not in practice.
12
@Graham Davies not sure what goes on in Aus. but Fidelity does a nice job of tracking investments costs and current value, short and long term. I'm sure other asset mgmt companies do to.
maybe it was an issue in the '80s but no longer.
This is what Citizens United created. Give your wealthy donors a tax cut for $xbillion and they can legally funnel $xmillion to your campaign. A tremendous return on a political campaign contribution---at the expense of the US taxpayers who will be paying off all this quid pro quo for the next decade. The only people who are not outraged by this are ones who do not pay taxes---meaning that Trump's base must be made up of the Super-Rich and the Work Under the Table So Pay no Taxes.
9
@McCamy Taylor you did notice, didn't you, that Steyer just gave 100mil and bloomberg 80 mil. Also did you notice that HRC outspent T by double and lost.
money spent isn't everything.
and O brought in more money than anyone...and managed to make a total mess for democrats across the country, other than 2008.
This plan really is bonkers and I say that even though I’d be a significant beneficiary albeit not as much of one as Mnuchin, the Trumpsters or DeVos. If Congress in their infinite wisdom wants to pursue another huge tax cut for the wealthy that’s their prerogative. Let them debate it and do it out in the open and then let them try to explain their rationale to their constituencies. The fact that the administration feels that the only way to push this through is through a questionable backdoor speaks for itself. This is just a really bad idea, bad policy and bad strategy especially in light of the burgeoning deficit resulting from the first set of cuts. With any luck it will end up in the dustbin alongside Trumps other harebrained schemes like doing joint cyber protection with the Kremlin, the other place that caters to kleptocrats.
14
What I find truly amazing is that the Trump supporters, for the most part, are completely clueless about this latest "protect the wealthy" action.
Those supporters will point to the crumbs called "tax reform" Trump tossed to appease those in the middle class and they cheered-not realizing the cuts expire, sunset, won't help at all by 2025.
Those supporters cheered when Trump complained about Obama's deficit-then Trump does the same thing.
Now, we have a brand new scam, a new round of vote-buying. This will also add to the deficit (as Trump attempts to invoke the time-worn excuse that "trickle down does work").
And the Trump supporters will cheer as their pockets are being picked to not only pay for this cut, but the previous cut and the hidden tax, the tariffs.
Yup, this winning is just breathtaking.
5
This massive wealthy-friendly, "welfare"-hostile attack on tax-based services will leave his swamp cronies awash in dough, while people who aren't floating logos on a shiny cereal box will be even less able to afford a roof, a dinner, and health.
They get more capital gains. For us, it's capital punishment.
6
$100B for the wealthy. $12B in subsidies for farmers. Next time I hear a blowhard republican talk about fiscal responsibility and the deficit I’m going to laugh my head off, which will require severe medical attention, thankfully covered by my employer sponsored health insurance plan.
25
Is this how the French Revolution happened, the rich got richer, the poor got poorer, and came the revolution and the rest is history.
14
@BB
That option is too late for America. Most Americans lead harassed lives of poor health, unstable and low-paid employment, etc. to be able to focus on an undertaking as complex as a revolution. The opiates 'epidemic' is so useful for placating the restless rabble, as well as the wholesale legalisation of cannabis which mindful Americans MUST ignore in the name of their sovereignty ! Don't exchange the opium of the masses for the narcotic variety !
Except that the poor French hated the their king and queen while the poor Americans, knowing that they are being lied to and robbed every day, love their corrupted and unpatriotic president.
Lots of side effects these guys typically never consider.
Doing this would disincentivize charitable giving on appreciated assets. Moreover, many folks will now consider deferring sales (e.g., of a long held residence), anticipating this possible change. And, if a homeowner were to save big on sale of her residence, should she still be entitled to the $500k cap gain exclusion? Obviously, this kind of tax “gymnastics” shouldn’t be left to the whim of Mnuchin/Trump; rather, legislation.
What if, after adding the inflation factor to cost results in a tax LOSS? Can I use that “loss” to offset other gains. Crazy!
There is also a tie-in to death taxes, far too complicated to get into on a proposal that should never get even to first base.
4
I agree with the thrust of this editorial but it seems to me that with a little homework, the NYTimes should be able to demonstrate and chart that this new tax break would harm the financial security of the Trump voters. I also believe that it could be shown that this tax cut and debt increase will slow the real economic growth of the economy that will adversely impact the working class.
Thinking a little further into what this loss of funds to the Treasury will do in regards to government investment in public works that would broadly benefit the economy, I think it will prolong the time it will require to make this country's infrastructure more efficient and more competitive in global markets.
Eventually, this loss to the Treasury will begin a great unraveling of our income security programs: like social security, Medicaid, etc.
Also, I am reasonably certain that this weakening of America's financial strength will reduce the capabilities of our Defense and Intelligence establishment.
In the drifts toward oligarchy and monopoly that we can't seem to brake, I see the US in a steady decline similar to the decline that Britain experienced in the first half of the 20th Century.
3
As long as the economy is growing at 4% GDP, Trump voters, and swing voters will not care about this. Once the bubble bursts, voters will jump ship. It's that simple.
2
Here I depart ways with the NYT editorial staff.
If I held a stock for 50 years and sell it for twice the nominal face value of what I bought it for, I would be paying taxes on 50% of the value.
In reality, the money I would get would represent a REAL and very significant loss based on inflation over a 50 year period.
How can anyone argue that taxing a a LOSS makes sense?
Argue what one will about tax 'breaks' for the wealthy, but this one is a common-sense no-brainer that would favor long-term, and likely senior, investors.
3
@dmckj - if you held a stock for 50 years that didn't split, didn't pay dividends or other distributions, and only doubled in price, then you deserve to lose money. If your stock did pay a dividend, and you re-invested it each quarter, just think how difficult it would be to index each tiny dividend re-investment purchase to inflation. Don't try to saddle the rest of us with 10x the record-keeping for a benefit that serves very few, none of whom need it to survive.
5
But that stock would likely appreciate far more than double in fifty years, given that an average rate of return on stock is 8%. And many stocks grow much more than that. And which fifty years are you talking about?
This seems like a dishonest approach, basically lying about the amount you actually paid. When you bought the stock you did not know how it would do. Trying to collect the 'winnings' from your gamble and pretend you did not earn all the money is dishonest. You are trying to shift the risk for your gamble on to the government.
1
@dmckj If you hold a stock for 50 years and you haven’t beat inflation by doing so, then shame on you. To be quite honest, you’re talking about an extremely rare case. The fact is that money made from money is already given favorable tax treatment, and money made through labor is disfavored. There is no good reason to sweeten the capital gains pot further.
1
This could be a golden opportunity for Democrats, if they only had the courage and conviction to take advantage of it. Democrats could point to Mnuchin's legally-dubious scheme to give the wealthiest Americans (including himself) another $100 billion gift as merely the latest example of Republicans serving the wealthiest at the expense of everyone else.
Democrats could campaign on making the lives of 99% of Americans better, in contrast with the Greedy Oligarchs' Party's exclusive interest in enriching the wealthy. Rather than the GOP's zeal to take health care away from the most vulnerable, Democrats could promise to improve the Affordable Care Act and make health care more affordable and accessible. Rather than Republican passion for increasing income inequality, Democrats could offer a tax plan that reduces inequality.
Democrats could be the People's Party that Trump and Republicans pretended to be in 2016, and actually drain the swamp of corruption that grows ranker and filthier by the day under Trump. Democrats could promise to actually put Americans first, rather than Putin and the dictators Trump so admires and envies.
But I'm confident no Democratic elected officials will do any of that. Not only do they lack the courage to confront the Ruling Party, but their own donors surely stand to benefit from Mnuchin's largesse. That may be why Mnuchin believes he can get away with it. If it's not legal now, it will be once enough loyal Republican judges are in place.
12
Two things the editorial left out:
1. While inflation is not at the levels we saw in the 70's, it does have a long term effect, and people resist selling long-term assets, where inflation has added to the tax bill due on sale. People hold on too long to houses and other assets, and that inhibits the economy and the efficient use of assets. A capital gains index for inflation is both natural and good for the economy.
2. There is one group that will strongly oppose this move. Universities and other charitable organizations. They live on getting donations of appreciated assets. The donor get the full deduction at today's prices and no capital gains tax. These also are key Democratic allies.
3
@wnhoke People hold on to houses because they live in them and become attached to their homes. And there already is a $500,000 capital gains tax exemption for the appreciation on your house if you’re a couple - which covers most of or the entire gain for all but the wealthiest Americans living in the grandest of houses, or those who live in a handful of areas where real estate prices are skewed far to the upside of the national norm. The median home price in the U.S. is still quite a ways south of $500k.
3
@chambolle As a general principle, it is always best (economically) for people to buy assets, when the want them, hold assets, when the use them, and sell assets, when they no longer use them. Capital gains taxes that are unindexed for inflation basically decreases the liquidity and efficient economic use of assets. I think that is a valid point despite some various tax programs.
While I'm torn about tax cuts that favor the rich (because of the graduated system, tax increases and cuts both affect the rich the most), I've always felt that getting taxed on inflation, as happens in the current system, is wrong. So I can't disagree with this idea, but perhaps the loss in revenue should be replaced by raising taxes elsewhere.
4
@Kerryknoll Replacing by raising taxes elsewhere-that is the concept that appears to escape this sad excuse for an administration.
Trump, our bankruptcy king, has his mitts on the economy just fine-spend, spend and spend with no regard where the money comes from-just like his businesses.
4
We can expect two things to happen in the run up to the mid-terms:
1) Trump bloviating about how HE provided America the biggest tax cut in the history of the world! (and we'll hear it many, many times...) and
2) Trump supporters in the crowds wildly applauding Trump's boast - while not understanding the near-zero impact of these cuts on their own taxes... And my expectation is that every time Trump bloviates on this this point the crowd's applause will follow...
Note: No mention of the huge impact of loss of medical coverage, elimination of coverage of pre-existing conditions, etc. to these same people.
8
Your editorial does not mention the extent to which this latest tax cut would increase the deficit (remember that old Republican theme?).
Anyway, as someone who has carefully invested in a few dozen stocks over the course of a few dozen years, and who has held onto most of them for the long haul, I would indeed eventually benefit from this maneuver.
But it was never my dream, intention or understanding that my cost basis for each stock ever be indexed for inflation. The capital gains tax triggered by sale is already divided into short-term and long-term rates, as well as keyed to the income level/tax rate of the person selling the shares. I will gladly give up my potential gain to keep the bandits like Mnuchin, Ross, Devos, and the Trumps from wallowing in further excess.
22
@bengoshi2b
Me, too! I'll be paying at least 15% tax on my first RMD this year, but count myself lucky to have profited from some investments over the decades.
We used to read about obscene greed and selfishness in history books, and cheered at movies when Wall Street vultures were brought down (movie mythmaking), but did any of us expect we would ever see a US Presidency so greedy and self-aggrandizing that it does more to rape and bring down the country than all the cheats and liars and human sleaze in our history?
And, the once "fiscally conservative" Republican party is the criminal!
The only way to turn this around, short of violence against the perpetrators, is to vote out as many Republicans as possible in the next 3 elections. Let's start over, overturn all of Trump's and this Congress' evil directives, policies, and legislation, and demand government to put the people first--before the robber barons and the never-satisfied greedy corporations that exist solely to make more profits and to control our one-time functioning democracy.
Perhaps the title should read:
Trump continues the Crony Capitalist Policies of his Democratic Predecessors.
All right. I think both titles are highly partisan. The purpose of the NY Times should be to inform not to indoctrinate.
But if opinions were truly sought, I would find myself agreeing with the modified title.
The fact is that the elderly poor, of which I consider myself one, face declining standards of living because of inflation. This is true because they live on pensions which are not fully indexed for inflation, and on bonds and savings which are devastated by inflation.
And inflation is the government's mechanism for paying for more services without raising taxes. Or in Trump's version, pay for government while actually decreasing taxes.
Inflation is itself a little white lie of course. It allows workers to pretend their salaries are increasing while inflation actually takes away their pay increases and then sum.
Governments, both Democrat and Republican, have added a second-order little white lie with the Boskin Commission, which changed the definition of the CPI, by changing how it is measured in 1996, while Democrat Bill Clinton was president.
The new CPI increased at about 1% less per annum than the old.
Most people didn't notice. But this explains how the government can continue to function with trillion dollar deficits.
Yes, Trump makes things worse for all but the wealthy.
But to win again, Democrats need to change their message.
2
i agree with most reactions on the consequences (it is shameful) but taking 2 steps back, it is wrong to tax people inflation (virtual) gains, you end up taxing assets held a long time much more than those held short term. i think allowing the cost basis to move with inflation and raising up the rates to compensate for the losses (or more) would be the clever move.
1
@Xavier
Your argument would hold a little water if capital gains were taxed as ordinary income. Capital gains are already taxed at much lower rates than wages.
Why does the tax code penalize earned income, and favor passive income?
10
@MidtownATL
This is a different question and a much larger debate, I am not saying it is right, I think the main argument is that people can move their capital much more easily than their labor.
Let Congress adopt Mnuchin's idea -- but make it REVENUE-NEUTRAL by raising the capital gains rate at the same time.
We need to keep that $100B from the wealthy. But we should also ensure that the $100B comes from those specific wealthy people whose investments actually paid off in real terms.
It's quite sensible to discount for inflation when computing capital gains. If the real value of my dumb investment hasn't changed for 30 years, I shouldn't have to take a tax hit to sell it. The taxes should fall on my savvier friend who got the same nominal gains in only 5 years, beating inflation. Fixing this will allow more rational behavior by investors.
The low capital gains tax rate is partly because some of the gains are due to inflation. If we fix that problem, it makes sense to raise the rate accordingly -- exactly up to the point where the change is revenue-neutral.
9
In theory I totally agree you should adjust gains for inflation. But you want to do this AFTER giving the top one percent 34% of the benefits from the recent tax cuts? That's also half of the benefit to the top 20%. Sure press forward. It will just remind those Trump voters in the lower 50% that his promises won't help them.
7
I think the NYT's and the WaPo, and I don't know maybe the WSJ should do a piece on how this would really effect someone with say... $50,000 in stocks in their retirement fund. Or maybe that $75,000 increase in the worth of their house.
Don't forget to include the fees for the accountants who would be necessary to figure out your new adjusted cost base! You will never be able to do that yourself, it is not just the forms that will be formidable.
And let's not even get into any capital cost depreciation that you may have taken on some other capital asset over the years. Fun with arithmetic, for sure.
I think a bunch more people would have to be hired at the IRS too to process it all too. How much more would that expense add to the forgone tax revenue?
Capital gains in Canada are taxed at 50%, I was gobsmacked to see that the US rate *for unearned income* is 20%.
15
The open thievery aside, the economics of this plan are patently absurd. This wrongly says that whatever economic gain on has gotten from inflation is ignored - for the investor class only. If you invested $100,000 back in the day, that’s what it was worth then. If you sell that for $200,000, that’s is what it’s worth now - plain and simple. I’m close to the 10% that could benefit from this. But this is is just another ruse to complicate things so the “advantaged” can pay less tax. Where is the lost tax revenue coming from? What happed to that simple tax plan that could be completed on a postcard? And they want to openly SNEAK it in without congressional approval?
For Nixon it was the plumbers. Here we have the plunderers. Sad. Massively.
29
Clearly this reinforces the contemporary revised political doctrine that government exists for the few and is managed by same.
11
Guys - have some intellectual honesty. Obviously people with larger capital holdings would benefit more from a fairer system of capital gains, but so would EVERYONE who owns a house or a stock. Thats lot of people. You strategy of framing it by what % of the benefit falls to what % of the people is a class warfare tactic. Bottom line is less money for government to waste.
1
@John Wilson Wrong. If you own a house, sell and roll the funds into another house, you don’t pay capital gains tax. If you sell your home and don’t roll over - say, because you’re retired and downsizing or renting - you get a $500,000 exemption from capital gains.
If you own stock in a 401k or IRA, your money is taxed as ordinary income when you begin to draw on your savings. Capital gains indexing won’t do you a darn bit of good.
This is another windfall for the wealthiest Americans. Sure, there may be instances where the benefit will extend beyond the richest 1%, but those will be few and far between. asnd the fact remains that capital gains already receive far more favorable treatment than earnings derived from blood, sweat and tears labor. There is no pressing need to sweeten the pot.
8
Less money for government to waste on things like schools, roads, and healthcare.
4
I own a small internet business and made a total of $1303.00 profit for 2017. Got an IRS letter today stating I needed to file and pay self employment tax which I calculated to be $93.00. Not much but considering these abuses I should refuse to pay these thieves one red cent! DEPLORABLE!
27
Pure is an adjective which demands a noun. Proctor & Gambles Ivory soap ads of "99.44% pure" never made sense. Pure what?
Yes their motives are pure, pure unrepentant unbridled unhinged greed - and all so un-American.
11
@John Babson
In the sense of, for example, "free from what vitiates, weakens, or pollutes" (m-w.com), it doesn't demand a noun.
2
Do they really think that their base is so dumb? After making out like bandits over the past 20 years, plus last years tax cuts now they're going to give the wealthy even more money???
How is it good for the country to have such a small percentage of its citizens controlling so much of the wealth?
7
@cort in answer to your question about the base...Yes
1
Like the Monty Python great John Cleese said when Trump was filling his cabinet back in January of 2017, “it is as if Trump is outfitting a pirate ship”.
60
With the income distribution that has been achieved (?) in the last forty years why would the editorial board object to one more plank in the vessel of the plutocrats and their governmental agents so they float a little higher? They may need a faster vessel to escape the coming storm.
7
Infrastructure plan to fix our failing roads, bridges, and railways, while employing many thousands in the process?
- no money
Improvements to the medical and mental care of our veterans who have served this country honorably?
- no money
Health care for all, so kids are better prepared for school and adults are better prepared for work?
- no money
Cyber defense to protect our nation from foreign governments causing digital mischief and mayhem?
- no money
Handouts to the wealthiest citizens, in many cases some of the wealthiest people on the planet?
- absolutely, add to our debt and bypass Congress too
This has nothing to do with helping anybody in the general public; it has everything to do with "legalized" theft being perpetrated by white collar criminals who shall never be satiated, no matter how much they manage to acquire.
129
Dear Trump Supporter,
As your non-Union wages remain flat, while your hero continues to rob your kids of any chance at paying off school, buying a house, affording healthcare, raising kids or ever retiring, you can still look in the mirror and take comfort in what a stable genius you are for still supporting this guy.
Cheers (and thanks)!
Sincerely yours,
America’s Richest One Percent
77
Perhaps we should change the name of the Treasury Department to the Welfare Department. We could add a line on every bill of currency thanking the user for their donation to the 0.1%.
11
Well, no, I did not think their motives were pure; that’s innately evident. But maybe the bigger question is how does Trump’s base continue to not see or acknowledge this president for the fraud that he so obviously is. He has done virtually nothing for any of them. For the most part I have withheld judgment on those people, given them the benefit of the doubt, waited for them to come to their senses. But, there comes a point where you just have to accept the fact that their unrelenting support of Trump is just plain stupid. It is what I call malamute logic, which is to say, even my Alaskan malamute can figure that out.
19
These American plutocrats may find it is not so fun to be a rich man in a poor country. That’s where we are headed.
39
WWI was originally known as the "The Great War" because when it was over people thought the world had learned it's lesson. Obviously, those people never predicted the rise of a guy like Adolph Hitler.
1939 marked the end of what was known as "The Great Depression" because when it was over people thought the world had learned it's lesson. Obviously, those people never predicted the rise of a guy like Donald Trump.
In this light, I'd like to coin a new term, "GDII", as in "The Second Great Depression".
12
Of course, after both WWII and the GD, "Never Again" got rather promptly binned.
In swept the marketers to head off outrage with vocabulary. Later wars became "kinetic military actions". Later depressions, smaller and otherwise, became "recessions".
I'd say we're long past the "Second", or third, or tenth depression. But with "covfefe" as monkey at the typewriter, the next to come will indeed feel like only the second for us, while his ultra-loaded friends sip martinis, mulligan par-3 drives, and say "what depression?"
1
Could this administration be any more depraved?
11
@Truthiness
You know the answer. There's no bottom with the Trump administration. Almost everyday they test the limits of depravity and keep moving from one plunder to another.
"The base," whose intelligence apparently cannot be underestimated, still supports these creatures!
what a disgrace, this administration, the worst in recent history,
greed is disgusting, they are not capable of acting in the best interest of our country, and do not belong in the positions they hold .
dark time for america, please vote them out in november,to sideline this despicable president, and cabinet.
7
Colludy J. McTreason's crew at their finest.
11
Any stock available in guillotines yet? If so, sign me up.
18
From an economic standpoint, accounting for inflation makes perfect sense. And as the US will probably have to inflate its way out of the growing debt bubble- local, state and federal- sooner rather than later, talk of indexing is very timely. The fact that present tax treatment of capital gains does not account for inflation is not an argument for the status quo. One would think that there would be wide support for eliminating taxation on non-income, i.e. inflated, not real, appreciation. But that doesn't take into account the politics of envy as espoused by this editorial. Envy and resentment will always trump (pun intended) common sense.
3
And what - from an economic or any other perspective - is the rationale for capital gains being taxed at a rate that's significantly lower than that for income?
20
Because it has already been taxed once, as income, at income tax rates, before it was invested
The principle was already taxed as income. That's why the purchase price is subtracted when assessing capital gains.
2
Republicans' big tax cut in January at least included some temporary crumbs for those not in the top 1%. There is no such fig leaf in this heist for the uber rich. It is unlikely to be accepted even by Trump's base.
6
You overestimate his base.
If Trump’s base is even aware of US Treasury’s new criminal proposal. Many of them don’t read the news, they only listen to what Fox Propaganda tells them.
1
Trump’s base is the 1% in their hermitically sealed ivory towers.
The ones attending his rallies in the MAGA hats are just unpaid extras for the propaganda channel that is Fox news.
Wow. I mean, the grift is out in the open.
Given the myriad scandals and outrages of this White House, it's almost gone without notice that the spigots have been flowing for the rich since Trump took over. Just brazen windfalls for the richest among us - the Trump clan included. Rampant, brazen corruption.
39
This whole thing looks like a head-fake to me; an alternative to "no collusion, no collusion."
4
The NYT Editorial Board seems, recently, to have adopted the Gawker Manual of Style. I suppose I can't blame them for making an effort to welcome (pander to?) younger readers.
That said, I agree wholeheartedly with what this editorial expresses with such youthful exasperation.
4
Paid $3.079 for gas today. An over 50% increase over Obama's time in office. Thank goodness for the Trump tax cut: my taxes went up only $3487. I won't need to buy a new car this year which, if I did would add another $8000 to its cost.
Groceries up
Energy costs way up
Taxes way up
Our standing in the world: plummeting
The photo op with Kim - build more bombs
The secret conference with Putin? We cannily guess what obscene tawdry behavior happened there.
Trump: a global joke
As for me? I'm worried the jerk will fill out his first term
84
I agree with the comments already posted here. I would so love to hear from a Trump voter who doesn't belong to the super-rich category whether they're sick and tired yet of winning so very much.
34
" I would so love to hear from a Trump voter who doesn't belong to the super-rich category whether they're sick and tired yet of winning so very much." @Jaime Lire
No problem. Just go to one of those Trump rallies, listen to the blithering idiocy of the "speaker" and pick any attendant at random. Revved up and not tired at all.
Unbelievable.
1
@Jaime Lire Those voters don’t read the NYT because they "don’t need no stinkin' free press".
@Jaime Lire In the minds of the non-rich Trump voters, he (1) is doing a fine job (2) has delivered on his promises (3) stands up to the Washington Swamp; (4) is indirectly doing the Lord's work. The end justifies the means.
Everything else is fake news. They are aspirational, also. As long as they have a chance for greater wealth, they see nothing wrong with trickle down economics. They are Lafllering all the way to the bank, or so they think!
This is a kleptocracy, pure and simple.
15
Trump is enriching America's 1% richest individuals and at the same time he is fooling his base by committing a scam on them.
Democracy can not thrive where the electorate is a fool.
22
The revolution is coming, Donald.
10
What's to be surprised about with Emperor Trump and his band of bandits?
From the time that the first cells of cancerous Empire took hold in Rome, the series of Emperors extended to dozens, and the Empire-enabling Senate corrupted everything it touched --- while the distracted and over-entertained citizen/'subjects' were powerless to stop the collapse that Christ lit with love.
As Frost said, and Emperor Trump would mock, as fake rather than 'good news' --- "Something there is that doesn't love a wall" nor an empire.
3
How many editorials and commentaries and cable TV interviews to I have to read before I hear the one rational solution to the fairness issue on investments which are reduced by the Fed's 2% inflation requirement each year, or worse. No one should ever have to pay taxes on imaginary income.
The solution is to adjust the value of investments for inflation and raise the tax rate enough to run the government, stimulate the economy, and keep deficits to a level that will keep Paul Krugman and Paul Ryan happy.
3
@steve
What is so special about capital gains in regard to inflation? Other passive income such as interest and dividends is not adjusted for inflation when taxed.
And if we're going down that rabbit hole, why isn't the minimum wage adjusted for inflation?
4
The Dems have failed spectacularly over the years in making a moral and philosophical case for their values, because they have been too scared of offending so-called moderates and losing their votes - which they end up losing anyway.
Well, now the administration's capital gains scam is handing them a golden opportunity to make gains in the capital at election time. If only I could be sure they won't blow it.
21
@mancuroc They are puppets to the same donors.
Trump administration thought processes.
"Oh look a wealthy American whose lust for money hasn't been satisfied. Lets help him"
There is no ideology at work. It is greed and outright theft.
Maybe those people getting tax cuts can make clothes out of money to show off.
11
This is clearly an effort to further line the pockets of the rich,
If Congress wants to help homeowners who fit into the other 90%, it should adopt legislation that provides there is NO taxable capital gain on the sale of a principal residence which has been owned and lived in by the owner for at least the five years prior to the sale. That would give tax relief to the people who actually need it the most.
6
Let them push it through.
Then they will have no excuse or recurse to prevent Wage rises, The Minimum Wage, Overtime, Student Debt and ALL the many and various ways they have prevented the Majority from maintaining their economic equity as inflation and/or cost of living adjustments have been frozen, delayed or not permitted across the spectrum over the years.
Proven by the simple fact that the minimum wage in 1969 when adjusted for inflation was worth $10.70 an hour whilst today's federal Minimum wage amount stands at $ 7.25.
Meet Mnuchin's gambit head on. After all, what's good for the Goose is good for the Gander.
11
Republicans will claim that the reported wage gains this week are proof that their policies are working.
3.3 Million Americans make minimum wage. The minimum wage didn't go up this week so the wage gain clearly didn't go them. Their rent will go up though as will food. Health care isn't even on the radar.
No, the reported gain went mostly to the top 2 or 3% of earners who skew up the average making it look like wages grew, when all that really happened was that rich folks had more money due to the first tax break.
Now the plan is to do it again. This is just another case of Trump and the Republican oligarchy robbing poor folks blind to enrich the donor class - pure and simple.
Vote Out All Republicans - Impeach Trump!
24
@Jason Funny how a simple mathematical trick is never called out or explained by the media - any media. It's like the "Bill Gates Effect". Bill Gates walks into a room where the average income is $50,000 and the average income rockets to $100 million. How many people in that room would be rejoicing at their sudden good fortune, yet the same conjuring goes on every time the GDP goes up or the GOP passes the "greatest tax cut in history"?
11
"Quick! Let's steal as much as we can from the US Treasury before the Democrats get hold of the House of Representatives again and try to stop us!" said the Richest .1% of America.
17
Thank heavens this is illegal. Surely Mr. Mnuchin knows that. Is he doing it anyway so the filthy rich can "oligarch" out the cash while the case works through the courts? These fine public servants are guarding the henhouse. The Trump Republicans apparently believe the Trump cult has completely and irrevocably lost their marbles. So long as Trump goes after brown people, Mnuchin and the other White House millionaires can steal the nation blind. Americans who are living in the real world not reality Trump TV land are watching the nasty rich guys in this White House stick it to the little guys. Yet again. They've broken every working class economic promise not based on magical thinking. The last tax-cut-for-the-rich did nothing for the net worth and savings and wages of everyday Americans.
8
From the book of Mnuchin, Chapter 1, verse 1, "Blessed are the wealthy, for they are rich."
9
Trump supporters think this is a good idea. Seriously.
10
Now we know what candidate Trump was talking about when he talked about "winning."
There is no bottom too low to hit, no greed more bottomless than that of this kakistocracy.
(Kakistocracy (/ˌkækɪsˈtɒkrəsi, -ˈstɒk-/): a system of government which is run by the worst, least qualified, or most unscrupulous citizens.)
10
As with the Bush tax cuts, Republicans will run ads showing the mom who can now use her $40 tax rebate to buy shoes for her kids while millionaires and billionaires, not show, went laughing to the bank. And Trump voters will line up to vote for it, just like they voted to get rid of their health care, their unions, their clean air and water, etc....
38
PT Barnum or somebody said there’s a sucker born every minute. Well, most of them grew up to be middle class folks who believe the Republicans’ never-ending spiel about how tax cuts geared to the wealthy benefit them, too. Because, you know, they’re going to get 3% of the pie, or an extra $20 a month, or whatever. That’s all they hear, or all they need to know. “Hey, it’s enough to buy a tank of gas or a carton of cigarettes. What’s it to me if Steve Mnuchin can buy another jet with his cut?” With enough people who think like that you can get away with anything.
25
The wake-up message for Trump and his minions will come when they discover that 90% of 25% (Trump's base of the registered Republicans) is only 23% of the voting public.
That they have a subliminal sense of this danger shows in the Republicans' fervent efforts to purge voter rolls of legitimate voters and to distract the public with claims of voter fraud (which, as far as I have seen documented, is limited to Republican zealots).
Can't wait to watch them squirm when the votes come in on election day, 2020.
4
If the super-wealthy think their taxes are so high, why do they keep trying to amass even greater wealth? Shouldn't they be distributing it all to those who have less? Shouldn't they divest and pay less in taxes because they own less?
How about a Mnuchin foundation that builds free housing for everyone who earns less than $18,000/year? The interest and dividends can support the utility bills for all those poor people.......... and Mnuchin isn't the only one who can do this. Everyone in the top 1% of earners--those with net worth over several million---need to Make America Generous Again through real philanthropy that houses individuals on the streets and those who are forced to pay more than 25% of income on decent places to live.
But, no, the greedy billionaires must keep it all for themselves, even the "taxable" excess while they play with their several houses and yachts.......
Pay your taxes, all you 1%ers......we who earn 0.001% of what you money grubbers have are taxed at a comparably higher rate.....we have nothing to hide from IRS. Betting you hide a great deal, ya money-hungry despots........
14
these people will end up like the czars of a century ago.
7
This is what Republican nihilism looks like; rob the public treasury to buy yet another private jumbo jet, burn up the planet's resources forever and leave future generations nothing but endless dept and a world that is a radioactive cesspool.
Why would they do that? Because they can. Hey, if they lack the genius to create civilization then they at least they can prove to us that they have the power to destroy it. They will leave their mark in history like a gashing wound.
30
This is a man who foreclosed on a 90 year old woman because of a TWENTY-SEVEN CENTS accounting error. What else would one expect from such a thief.
67
I counted two references to the French Revolution, including the guillotine, within the first 100 reader comments. I've never seen that happen before in NYT postings. This tells me that people (including the editors) are truly fed up. If Mnuchin had any sense, he'd realize the danger of a populace with nothing left to lose.
67
The barricades are calling
@skeptic
What is the "real America" and why do you insist that the people commenting here aren't a part of it?
@ghsalb Agreed. I noticed the same thing. I also notice that the tone of each comment is very angry...mob-size angry. I can picture a run on the White House , Capitol building, or Treasury by millions of angry citizens carrying torches a la French Revolution.
It just came out one day.
To the tune of "The Beat Goes On" by Sonny and Cher...
The sleaze goes on, the sleaze goes on
Fox keeps pounding the drivel to their brains
La de da de de, la de da de da
Charlottesville showed all their rage, uh huh
History will burn that page, uh huh
White House lies, the current thing, uh huh
Trump thinks he’s become our king, uh huh
And the sleaze goes on, the sleaze goes on
Fox keeps pounding the drivel to their brains
La de da de de, la de da de da
The EPA has gone offline, uh huh
Polluting air and water’s fine, uh huh
And healthcare will be cancelled for the poor
And those Trump voters still don’t know the score
And the sleaze goes on, the sleaze goes on
Fox keeps pounding the drivel to their brains
La de da de de, la de da de da
Immigrant kids are hauled off to their cages
Trump keeps up his sociopathic rages
Tax cuts for the rich will rob us blind
Paid through Medicare cuts, you will find
And the sleaze goes on, the sleaze goes on
Fox keeps pounding the drivel to their brains
La de da de de, la de da de da
Trump bows down to Putin like he's God
Grandpas watching Hannity just nod
The lies keep coming faster all the time
We’re watching our Democracy unwind
And the sleaze goes on, the sleaze goes on
Fox keeps pounding the drivel to their brains
La de da de de, la de da de da
And the sleaze goes on, yes, the sleaze goes on...
There is only one way you can change this tune: Vote Democratic in November!
47
@Beyond Concerned
Very Well Done!!
Get Cher to sing it B4 November!!
Editorial Board:
I've always respected your Gray Lady approach, but the angry, cynical tone of this piece is a dismaying surprise. It's expected from opinion writers but you need to rise above the bickering and the snark.
More than any other publication, we need the New York Times to hold the a firm, calm rational center. You're undercutting your moral authority with cheap, easy anger. Please remember your role as an essential touchstone for the country right now.
4
Lots and lots of crooks and freeloaders in Trump's administration!! Lock them all up!!
[Maybe I should emphasize in all-caps as dingbat in chief does]
10
Any average Joe or Joanna who believes Donald Trump and his appointees are advocates of the working class are foolishly deluding themselves. These filthy rich people only want to get richer, the rest of us be damned as this latest scheme proves.
8
It is a reasonable policy discussion whether capital gains should be index to inflation but taxed as regular income, but not also giving them special lower tax rates. Hardly what is being contemplated.
In the meantime, ordinary folks with 401k's and 403b's invested in stocks will have their gains taxed as ordinary income, they great con of retirement savings.
13
@Nathan McD Income is income. Actually, unearned income should be taxed higher, not lower, than regular earned income. Awww, that would hamper investment in our great American companies. Yeah, the ones who have moved offshore, gutted pensions, soil the planet, employ peasants overseas with slave wages, lie to us, bribe our elected officials, feed us unhealthy foods, and demand 60 hour work weeks from the people left who actually have a 'decent' paying job.
11
It would be perfectly reasonably to adjust capital gains for inflation. There's a big difference on a 20% gain on a stock you bought 2 years ago, and a 20% gain on stock you bought in 1988.
But in that case, maybe capital gains should be taxed at the ordinary rate.
9
Savers who use a 401K would all look like fools. In a 401K, you make a pre (or post for some) tax investment that can grow tax-free. However, all of the income distributed is taxed at distribution, with mandatory minimum withdrawals.
With this tax proposal, a "buy and hold" investment strategy would allow purchases that will be mostly taxed at the reduced capital gains tax rate--after adjusting for inflation. There is a tax cost at the outset, but essentially most of the gains are tax exempted. For many investment/inflation scenarios, a buy and hold, and pay a massively reduced tax at distribution is a better deal. The IRA does have more investment flexibility--but financial instruments could be designed to show all gains a capital gains. This is already and issue, but this change would make it much more of one.
5
When your opponent decides to walk in the path of a speeding train, you get out of the way.
If Democrats are interested in recapturing the Congress in November and the White House in 2020 they should allow the Republican White House through the Treasury Department to cut the throats of Republicans running for office by unilaterally indexing capital gains for inflation. The maneuver, a longtime wish of conservatives, will enhance the wealth of wealthy individuals. It will also reinforce the weaknesses of the Trump tax bill by increasing the federal deficit, by depriving our government of much needed tax revenue for programs and initiatives designed to assist the majority of Americans and most importantly, by failing to be a much needed egalitarian measure designed to increase the stagnant wages earned by working Americans in the middle and lower classes, an albatross Democratic candidates for federal and state offices across the country are successfully hanging around the necks of their Republican opponents.
6
Redefining words in laws and regulations (and the Constitution) to mean what you want them to mean instead of what they mean in regular English or even in legal English is no new trick by the right wing (misnamed "conservatives"). It has been showing up in their legal decisions (think "speech" includes money) and regulations (think "torture") for years now.
9
we have a huge debt. the economy is humming along smoothly. we should be eliminating deficits, not adding to them. we should be taxing the rich more, since they get more of the benefit of living here. and they should be grateful for the system that made them rich, and want to give something back.
87
@slightlycrazy
Kennedy and Reagan cut taxes, and revenues increase.
Raising taxes is like killing the goose that laid the golden egg.
1
@mjazzguitar No. You have been bamboozled by the "laugher" curve. Do the math? It just don't add up.
Trump so idolizes Putin, he is building his own network of oligarchs to rule all of America.
And Vlad happily conspires with his protege, Trump, advising him how to dictate and concentrate U.S. vast billions in the hands of a few loyal comrades who in turn fund all of Trump's future campaigns.
17
If you look closely at the notorious Mnuchin-and-dollars photo from Nov. 2017, you can actually see this coming. Consider it an American Gothic for 2018: https://fortunedotcom.files.wordpress.com/2017/11/mnuchin-linton.jpeg
22
Last time I looked, it was for anyone who had capital gains. Are we living in a Marxist state now?
3
"What, you thought their motives were pure?" Yes, actually. PURE GREED.
I'd be OK with "index capital gains taxes for inflation" if they also indexed or adjusted salaries, wages, and other income to inflation too. Imagine the added tax revenues to be had from rising incomes?
Legal? Rules? Plutocrats and oligarchs are above such things as the rule of law. Their wealth always pardons them. While trump distracts, his cabinet of wealthy children and exploiters are busy cleaning out the government coffers behind our back and in plain view of the trump-adoring derrangement syndrome base, for all we are worth.
Tax cuts for the rich are nothing more than a government guaranteed paycheck in the millions for each idle wealthy - they have nothing better to do than to figure new ways to game the system they own to rip us off even more.
I'm more worried about Mnuchin-trump printing additional trillion for themselves to stash overseas. Isn't that what autocrats do? Has anyone made an accounting of our nation's gold reserves?
Trump can stand in the middle of Fifth Avenue (or Oval Office) and hold-up the national treasury and empty it out and not lose any voters from his derranged base.
28
Trump's administration is arriving at a level of kleptocracy to rival that of his idol and mentor, Vald the Impaler.
Trump and his billionaire buddies will be billions richer and the average American finds his wages stagnant, and, should inflation ever rear its ugly head, those stagnant wages will actually shrink.
The 1% become fabulously richer, the rest of America, not so much....
Disgusting greed.
Lock HIM up!
41
@William Fordes Impeach everyone with a net worth of $3 million or more. Yes, I said that. This is a government OF the people, FOR the people, and BY the people, "the people" being the ordinary folk in the $40K-200K income range. We are the 99%, the majority.
Who in their right minds need more than that to live well? Most of us live well on less than $75,000/yr.
4
Irregardless of the likely illegality of this proposed Capital Gains Tax adjustment, the fact remains that the money gained will only leave the country. The myth of "Trickle Down Economics" never occurred in any really significant capacity. For decades now, the wealthy who are the majority of wealth holders in America have been exporting their wealth in so many ways from secret offshore accounts to business investment in foreign nations under the popularized financial industry slogan "Globalization". The truth of wealth movement is out of the country and not "Trickle Down". I call it the "Trickle Out Economics".
It is indeed a heist just like the December Tax Cuts Bill was a payback to the wealthy by the Republicans in Congress and Trump as a gift to the wealthy who financed their takeover of our nation's government. Now we are left with a deaf Republican Monopoly Federal Government pillaging the nation at all levels of government.
The Republican party robbed our Government voice, our tax money, our future consumer taxes called "Tariffs" and is a criminal organization like no other has ever existed. I laugh at the thugs of the Mafia. The real rackets are the Federal Government now.
17
This tax change,if enacted will cost far more than $100 billion over time.
14
Who hasn’t sold a house, or has family who has, thirty years after buying it – perhaps because it’s too big and they want to retire to smaller digs? And they’re advised that to determine the “capital gain” that will form the basis for the tax they’ll pay on the sale will subtract the actual dollar-amount they paid for it thirty years ago from the sale price today? WITHOUT figuring the actual value of that purchase price thirty years ago in TODAY’S dollars?!
This tax-scam by government to artificially inflate their tax “takings”, as if inflation just doesn’t exist, has been going on since forever, and it’s not primarily the wealthy who have been the victims but middle class home owners, many of them on the verge of retirement expecting lower earnings for the rest of their lives. Mnuchin and Trump are being demonized for favoring wealthy cronies when this policy, if imposed through regulation as Mnuchin is considering, would be an immense boon to the middle class – by finally imposing sanity on a fundamentally unfair tax practice.
Years ago, government admitted that the “marriage penalty” was clearly unfair, that the non-indexing to inflation of the “Alternative Minimum Tax” was penalizing people never intended to be touched by it as inflation increased absolute earnings … but they hung their heads and stated that they couldn’t do anything about it, because they needed the money and didn’t have the votes to make things fair while increasing taxes honestly.
…
5
@Richard Luettgen Most house gains for the Middle Class are not taxed (ie. for married couples, the first $500,000 gain is tax free). This tax change will mostly benefit people with large and very long-term stock holdings gains.
74
…
Mnuchin and Trump are trying to do something never done before: making taxation honest. And the Times is lambasting them for it because it will mean less in tax takings. They’re not concerned about five billionaires selling their castles and keeping more of what they sell them for. They’re concerned about the tax effects of freeing millions and millions of middle-class home owners from an historical injustice. If Congress needs to tax more, let them do it honestly (hehehe).
Shame on you. The ONLY thing I find odd about this is that a balanced analysis of what this is and why they’re doing it hasn’t yet appeared in the Times. Heck, it hasn’t even appeared yet in a Trump tweet that’s been reported.
But it will appear elsewhere. And people will read it.
But it should be done by Congress, because they can means-test the practice, keeping capital gains rates at current levels for the middle class but simply increasing the capital gains rate on THIS type of sale for billionaires. Curious that we haven’t heard this obvious solution from the left. That’s because they want ALL the taxes, regardless of how dishonestly they’re taken.
2
@Richard Luettgen - This is somewhat mitigated by lower rates and the $500/250K exclusion on a primary residence.....somewhat.
3
Democracy used to be government by the people for the people.In the Trump era it is government by the ultra-rich for the benefit of the ultra-rich. The King of Con has morphed into Emperor Donald. Is anyone surprised?
13
OK, let's not be too troubled about this. Whether it goes or doesn't go, as with all gift giving, it's the thought that counts. It isn't that much money in the administration's scheme of things anyway. [How long does it take the Pentagon to burn through $100 billion?] It is my view its implementation would be net positive for the left in this year's election. Personally, I would love to run with speech after speech discussing the Tax Cut and this initiative.
5
So, what's new? Money grubbing, sexist, racist, xenophobes using the rest of us, while ignorant voters support them?
13
Recently, NY & NJ sued, contending that the constitution requires deductions for SALT. Plaintiffs are exclusively Democratic; their anti-DT credentials sterling,
If they’re successful, 57% of the benefits will flow to the top 1%,; virtually all to the top 20%.
Cue crickets from the leftist media. Not once did you ask what ultra-rich Phil Murphy will save if NJ wins.
Your hypocrisy is showing.
Again.
You leftists live in mortal fear that “the rich” might get to keep their own money. SS provides for a COLA to preserve the value of the benefits; why should it be different for capital gains? Answer: because your envy knows no bounds.
Conservatives support this because taxes ought to be based upon REAL income, not inflated dollars.
You leftists celebrated when BHO took out his pen and phone and conjured up DACA out of the ether. Did he permit his own words – that he lacked the legal authority to do it – stop him? Don’t be silly.
This proposal is at least arguably based on the statute: what constitutes “gain”? And who would have standing to sue?
The left NEVER permits trivialities like the law to stand between it an its preferred policy outcomes. Letting people – even those horrible, undeserving rich – keep their own money, is a Good Thing.
So, SALT suit – although utterly frivolous – provides a huge tax cut for the 1%, and leftists applaud. DT proposes something a lot more modest and sensible, and you produce a little of envious kittens. Go figure.
2
I support confiscatory tax policies at the top levels, because the needs of many Trump the excesses of the few.
And of course the billionaires didn't earn their worth on their own. They figured out a way to suck wealth out of everyone else and hoard it to no purpose. We need to take it back and put it to good use.
60
@Michael
You regressives think knee-jerk support of the wealthy gives you some sort of moral superiority. "THE Rich" made their money, or received it from someone who benefited from US taxpayer-paid infrastructure. No one is self-made.
I'm all for basing taxes on REAL income by taxing unearned income the same way as actual earned income.
16
“You leftists”. That very statement discounts your whole argument.
Even with the SALT deductions, blue states pay far more in Federal taxes than they receive in benefits. Red states are the moocher states no matter how you cut it.
If you are so jealous of the SALT deductions, move to a blue state where they care about schools, roads, etc. and stop your whining.
19
This proposal simply confirms what many observers have long argued, namely, that, for the GOP, taxes on the wealthy can never reach a reasonable level. Reagan and Grover Norquist's contempt for the role of the federal government (except in national defense) means that national taxes always exceed the optimum level.
This simpleminded laissez-faire approach to economics rejects the existence of public goods which only government spending can fund adequately. Better to subsidize private industry (using what source of money?) and let entrepreneurs decide which infrastructure projects will garner them the highest profits. The market rules. Ayn Rand (and John Galt) would be so proud.
2
@James Lee
It rejects the existence of the reality that Adam Smith was 1776 and we now live in the late first quarter of the twenty-first century.
1
This proposal would cost 102 B over ten years.
Not taxing unrealized capital gains at death [step up in basis] costs 40 B /year or 400 B /ten years.
Not taxing all dividends and capital gains as ordinary income cost 160 B /year or 1.6 T / ten years.
7
But, Mnuchin married a woman who grew up in a castle (like a princess!) and had his wedding officiated by Mike Pence. If that’s not holy matrimony, then the sanctity of marriage really has been damaged.
4
The latest Trump administration policy obscenity of using executive action to index the capital gains cost-basis to inflation in order to calculate taxation for the very wealthy should make all but the 1% rush to the polls to throw the GOP out of office everywhere. Doubtless the Supreme Court will eventually sanctify this Mnuchin-inspired ploy if, as expected, the matter should be litigated.
Brett Cavanaugh to the rescue!
3
They want to index something, index the FICA. Oh yeah, their brand of populism stops at the bank vault door.
4
Pure and total welfare to the 1%! Corruption on the grandest scale that would put any banana republic , tyrant , Tammany Hall , or robber baron to shame . Mnuchin lives up to his slimey career , pretty sure Louise is very pleased with her choice , very well matched in greed . What a world . Will fly-over country ever wake up .
12
I guess if this idea is illegal, then we having nothing to worry about and no need waste brain cells on this. I don't see other media outlets as outraged as the NYTimes about this.
Also FWIW, the long-term capital gains tax rate is already 0% for folks with lower taxable incomes. It is amazing how many people do not realize this.
2
Unfettered by common decency and sense of duty to their oath, aided and abetted by a soulless Congress, these plundering thieves will grab everything they can - count the silverware!
It’s the old Golden Rule: he who has the gold makes the rules. These are depressing times. We the people need a break!
9
This a classic con act. He goes to the rallies to keep his followers rile up and distracted. In the mean time, the sycophantic Treasury Secretary does the stealing in the back stage.
Where are the outrages displayed by Paul Ryan during the Obama years? Trump is getting more embolden by the day largely because Republican leaders are cowards and hypocrits. They care more about their own political careers than the future of the country.
15
The idea of indexing to inflation is a sound and fair one *IF* - and it is a big *IF* - it is coupled with changes to the rate of taxation on capital gains. If we were to index the basis to inflation, we should probably then subject the capital gains to regular (much higher) tax rates (no more preferential rates on capital gains). Something like that might very well benefit far more middle-income Americans.
4
That does not make sense. If the value of an asset goes up with inflation, then so does the amount taxed. What you ought to be arguing is that the minimum wage is indexed to inflation: This will help lower income people escape crushing poverty. Also, indexing AMT to inflation would help prevent more upper middle class people being penalized.
3
@Phobos
False choice.
And...
Minimum wage should perhaps be indexed to *per capital GDP (+) growth so that low wage workers don't just maintain a static standard of living, but see a real increase?
And... The recent tax package essentially eliminates AMT for most upper middle class people. (I did a detailed model of this.)
Also...
What I wrote makes complete sense. Inflation is simply the devaluation of money. If I buy Asset X for $10 when $10 buys a bushel of apples (++) and then 15 years later sell it for $18 and $18 buys a bushel of apples, the *nominal* gain of $8 is solely due to the devaluation of money (which is largely in the government's control outside of extreme events). I have earned zero *real* return on my investment. Thus, if you tax the nominal gain, I end up losing real buying power.
+ Or NNI
++ bushel of apples for simplicity; typically "a basket of goods and services"
Their motives are as as pure as E. coli. But heck they seem to be getting away with everything else so why not go for it, right Steve?!
7
This is what we expect from the wealthy ruling class that has full control of our government. I just wonder where all this money has been hiding, $100 billion for more tax cuts, $50 billion for that silly wall he pretends we need, $12 billion to bribe the rich farmers who might lose a little when they get hit by the tariffs the idiot put into place with no thought of consequences.
The recession is going to be one of the worst we have had. Luckily the republicans will have a solution - gut Social Security, Medicare and Medicaid, take away food stamps from the old and crippled. They have been plotting this move for years - right Paul Ryan?
1212
@Mary Dalrymple
>>>>They have been plotting this move for years - right, Paul Ryan?
Oh, indeed. The man wears a perpetual smirk of self-satisfaction these days. I have often wondered how he smiles at and hugs his children, knowing that he and his ilk condemn so many others to poverty and constant hunger. Like most of them, he believes the sufferers bring their hardship upon themselves, and are therefore worthy of scorn and well-deserved privation. He cares not a whit that policies he promotes contribute to that suffering, and in fact, he wants to worsen it by strangling as much of the social safety net as possible. That is the Altar of Republicanism he serves.
2
And don't forget, they'll blame the Democrats for all of it no matter if they're in charge or not! Not just sad... sick and immoral!
1
@Mary Dalrymple
Indeed, Hoovervilles are the GOP's vision for America.
At this point it's hardly surprising that another sweetheart deal is in the works for the super rich because that has been the sole goal of this administration since Day 1.
And that this decree is coming from Steve Mnuchin, who likes living the life of luxury on the taxpayer's dime is like adding salt to the wound.
Americans would do well to remember this come Election Day.
This is not 'winning'.
608
@N. Smith - if you sell your house do you not think you should be able to take inflation into account when you calculate your cost basis? Seems pretty fair to me - for everyone. Wake up and stop being brainwashed. This is about rolling back government domination of our lives.
It has been the sole goal of the Republicans for 50 years.
Regardless of the worth of this plan, I can say that this piece's bruting of $100B of tax cuts by referring to another NYT article that claims a value of $100B in it's intro only to reveal it's $102B over 10 years. So in budget/revenue terms it's a drop in the bucket. But enough to get the readership riled up. Throwing big numbers around always makes op-ed pieces look good.
Now for most of us calculating the indexed value would be pretty tough, esp. as neither we (nor anyone else) knows which index of inflation might be used.
The other thing that's iffy is that no one can predict how much selling would be done to take advantage of this policy. Lots of us are adverse to paying taxes until we have to, and selling appreciated assets still will result in taxes that would, in many cases never have been received by the government.
If the government wanted to give those of us not in the 1% a break on capital gains, they could just reduce the rate on assets held over 10 years, for example.
1
To paraphrase Lyndon Johnson, if you can convince a Trump supporter that any person of color or ethnic group or nationality is doing better at his expense, the Trump voter will gladly allow The Don to pick his pocket.
15
The greed, although real and earnest enough, is to decoy us away from the real point, which is trying out rule by decree, and seeing how that goes. This is a clever way to do it. The Congressional Republicans will not stand in the way.
45
What keeps getting lost in this chaos is that every tax cut is money that will have to be cut from programs like Social Security, Medicare. So those of us who are not in the 1 percent will have the benefits we have paid in to all our working lives cut. So Devos can afford a second 40 million dollar yacht?
65
4Katydid,
Well, DeVos and her family only have 10 right now.
Plus, the other day one got loose, and now has some scratches, so it too needs to be replaced.
https://www.superyachtfan.com/yacht_seaquest.html
5
@4Katydid
My dear, Ms. DeVos has ten yachts already - and at least four private planes and two helicopters. So it’s even worse than you thought.
1
@4Katydid
Uh, that would be a 10th (TENTH) $$$M yacht.
These robber barons see the handwriting on the wall, they're going to lose the House in 2016 and the Presidency in 2020, and a good bet the Senate also. In the meantime they'll grab everything they can grab with their greedy little hands. If it isn't capital gains, it will be something else.
Just a bunch of crooks, and they don't even bother to disguise themselves.
230
The same people who would begrudge disability to an injured manual worker, claiming socialist handouts, gladly take tax handouts from government. The only difference? The size of the handout. Everything about this administration is based upon pathological lies and crass hypocrisy. Even the Italian Mob had a semblance of honor. This lot has nothing whatsoever except abject greed.
193
@James Devlin So true. Size matters. A former neighbor went to prison for stealing a paltry $196,000. If it had been at least $1,960,000, he would never have served time. Amateur!
While I am not in favor a $100 billion tax cut, let alone an illegal one, you need to stop playing with the statistics. The wealthiest 1% of Americans, like it or not, own at least 40% of this country's wealth. The weaIthiest 10% of Americans own at least 77% of the wealth. It is the disparity between the wealth owed by the top 1% or10% and the rest of the country that results in those groups benefiting the most from the proposed decrease in capital gains tax bills. Address the basis wealth disparity in this country and legal tax savings disparities will resolve themselves.
2
@Jay Orchard
The point is, why make this policy change? There are many other policies that can be changed that would, by definition, benefit those on the lower end of the income distribution, such as indexing the minimum wage to inflation.
I think it's fair to say that most Americans believe themselves to be honest, hard-working, intelligent human beings. They like to believe that they are "exceptional" and that god him/herself has ordained the U.S.A. to be the greatest country in history. They actually believe that through hard work, they will achieve "the American Dream."
Unfortunately, a huge number of Americans are not honest, nor hard working and, indeed, they are not intelligent (perhaps they are worse off by being willfully ignorant). This is why we have, today, a government run by truly evil men and women who are only concerned with enriching themselves and their class. You'd have to be a fool to believe they are looking out for regular folk. They put these sociopaths in charge. They do this because they really think they're going to join the ranks of the uber-wealthy. They have conned themselves and have doomed the rest of us to lives of quiet desperation.
889
I have no problem calling out Americans on their nonsense. I'm sorry I hurt your feelings, but sometimes the truth needs to be told.
@mrfreeze6
The rest of us should be ANYTHING except quiet.
If we don't fight for ourselves, it is a sure thing that no one else is going to.
"They have conned themselves and have doomed the rest of us to lives of quiet desperation." @mrfreeze6
Or worse.
Much worse: doomed to lives of raucous desperation.
Can you say "Revolution" ?
Just pathetic how everyday people just let the "dominators" as I call all the greedy immoral sharks that always end up on top walk all over them.This is "Let them eat cake."
"Them".
Reminds me of the scene in The Third Man, when Orson Welles, who has been selling fake penicillin and letting kids die for profit in post WWII Vienna, tells Joseph Cotten, as they are at the top of a tall building looking down, that people look like ants at that height, and what difference does it make to rub out a few ants if you have much to gain for yourself. I paraphrase.
Would American police shoot live rounds at a million protestors who invaded Congress demanding this wholesale theft be stopped?
We have the numbers. These subhumans need the bejesus scared out of them.
How long will the masses take this? They vote in the GOP, and everytime since the 1920's the GOP overreaches and does massive harm to those who vote them in. Then the Clintons turn the Dems right. Sleepwalk Nation.
9
@David Shapireau
I'm remembering that they were sitting in a Ferris wheel. Wrong?
1
@David Shapireau If you recall, it was Obama who famously said to the assembled plutocrats that he was the only thing between them and the pitchforks, and then proceeded to give away the store, asking nothing in return. He wasn't out of office two weeks before he was snapping selfies with a succession of billionaires. This our ruling class exemplified; party doesn't matter.
1
@stan continopleYou are dead on correct, sir. I did mention the Dem turn to the right, and Obama , as you so rightly point out, was a sycophant to the bankers, and just like the Clintons, is filling his pockets with absurd fees for speeches. I mean really, all that money for the same platitudes reassuring the rulers of the country in every speech. It's an unspoken(or maybe secretly spoken) bribe for ignoring the common people. Again, how long will we 99% take this contempt from the "elites"?
I am populist. Definition: if it is popular with really rich people I am for it.
7
Grifters gotta grift, and donny and his Cabinet of gnawing termites can't help themselves - leave it to the guy that made his pile by throwing widows out of their reverse mortgaged homes:
https://money.cnn.com/2016/12/15/news/companies/mnuchin-reverse-mortgage...
Despicable Vulturedom on parade !
119
@R. Law. Sure, and condoned by the president who tosses rolls of paper towels at the peasants? His respect for the lowly? Take care of your billionaires pals who belong to your Florida exclusive club- - guests who fly there unnoticed on Air Force One? Those who sneak on thru the back door before the plane rises . . .
1
There is an argument that could be made for indexing capital gains for inflation, but only if capital gains were taxed as regular income. Real estate investors (like Trump) who make huge quick profits in excess of inflation would then pay their fair share while homeowners whose houses increase in price over the years with inflation would be protected.
11
Treasury Secretary Mnuchin ought to be politely requested to turn out his pockets whenever he leaves the mint since, clearly, greed head that he is, he can't help himself.
16
Insensitive? or is this another signal that the in-crowd thinks they might be on the way out....Either way, this is incredibly exploitive -- of everyday people who work and pay taxes.
9
I recently read an article that Munchkin (that's what I call him) claimed that once this windfall was unleashed, it would stimulate so much growth and so quickly, that the Treasury would not see any decline in revenue. Here is the scary part. He actually believes it.
Trump has surrounded himself with extremist, ultra-orthodox, followers of the trickle down God. After decades of trickle down failure, they are still telling us that the Great Pumpkin will appear. What these fanatics refuse to realize is that they live in a different pumpkin patch than the rest of us.
They give themselves huge tax breaks which does nothing but line their pockets. Then they tell the hoi polloi that the check is in the mail. Guess what? It works. About 35% of the population buys the whole yarn. Their profit Hannity told them to sit in the pumpkin patch and wait. They believe that too.
So go ahead. Give the 0.1 percent another big windfall. Why not? They got everything else. What's another $100 billion on top of the Bush tax cuts and the new Trump $1.5 trillion cut. Heck, we should be paying these people instead of taxing them. How about we stop taxing all income above $1 million/year? Just think of the size the Great Pumpkin will be then?
175
@Bruce Rozenblit
Heck, we should be paying these people instead of taxing them.
We are paying them. The working people produce the wealth in this country, no the so so-called "job creators."
2
The image is pigs feeding at the trough, with all due regrets to our porcine friends for such inhumane anthropomorphi-zation.
The impulse at the core of this corruption is unmitigated greed both of filthy lucre and the political power to load your own plate with more than you possibly can eat while the wretched starving are left with their gnawing desperation behind chain link fences.
But, hey, stock market is booming, corporate profits through the roof, CEOs collecting huge bonuses, what dark clouds are gathering in the distant horizon?
Just lock him up already.
128
Let’s not forget the almost $50B per year tax loophole that allows assets to be passed to heirs at market value, avoiding all capital gains liabilities.
Here in the South we have a saying; “pigs get fat but hogs get slaughtered”. Now it seems “pigs get fat but GOP hogs get fatter”.
13
Since you bring up the, "seriously math challenged," you may want to join their ranks. I had always thought you determine how much a stock has gained by subtracting its original purchase price from its selling price. Not the other way around as you claim.
4
That is a $100,000,000,000 tax cut for the mega-wealthy.
I wanted to show all the zeros. There are so many!
In 1992 the Bush Senior Justice Department’s Office of Legal Counsel said such an act would be illegal.
Beware of Trumpian doublespeak buzzwords that make this plan sound normal. All I can think of is Mnuchin and his spouse wildly happy to be photographed with large images of U.S. currency. That happened.
97% of this proposed action is shipped straight up to the top 10% of U.S. earners. Is the goal to completely empty the U.S. Treasury? Who will guard the Treasury Hen House from these grifters?
671
@One More Realist in the Era of Trump
The wolf, Moneyuchin, is in charge of the Treasury hen house.
1
@One More Realist in the Era of Trump.
GRIFTERS GRIFT that's what they do
1
" Is the goal to completely empty the U.S. Treasury?"
I think not!
The goal is to have complete control of government in the United States including the US Treasury a return to 1763 before the American War for Independence, a king, feudal lords, vassals, tenants and serfs.
I must admit that I don't understand Republican math any longer. As the Times reported a few days ago, the federal deficit is zooming toward $1 trillion this year. Just for this year! And a primary driver of that is significantly lower tax revenues due to the last Republican tax cut. So, why cut revenues even further when that only increases the size of the deficit?
To put it in terms everyone can understand, how many of us would agree to a salary cut and then go out and charge more on credit cards? I wouldn't let this Administration anywhere near my check book. No wonder interest rates are going up!
38
When will this national nightmare of Trump be over? At long last, when will it be over?
9
Something all Trumpians have in common is an ungodly amount of gall, no shame and an unending desire for more wealth. There is no such thing in their greedy mindset called ‘enough’.
Trump has said that the one book he considers better than his Art of the Deal, is the Bible. What about that part in the New Testament where Jesus said it is easier for a camel to pass through the eye of a needle than it is for a rich man to reach the kingdom of heaven.
38
@Tim B The church of New Trump worships Mammon.
9
Please tell when "being illegal" ever bothered the DJT administration? They never gave this possibility any thought!
14
It's just obscene...
...and they're not even TRYING to lob a "trickle-down" or "a rising tide lifts all boats" idea, or some theory that would have garnered the aplomb of Arthur Laffer or Friedman.
Nope, not even that.
Not even an Econ-101 diagram. Not even a one-page rationalization as we got before "tax reform". Just - "we're going to take this", and by-pass Congress.
Do we need an actual revolution, finished-off with guillotines and all, to drive the point home with these people?
82
@BDYes, I'm indeed afraid you're correct.
6
@BD
Yes. We do need a revolution, if Nov midterms do not rid us of the Greedy Old 'Publiklans.
It has come to that.
Just like Vlad and his buddies ordered. Who is your daddy Donald? Pure and unadulterated greed and corruption, point-blank, in-your face, just-try-to-stop-me arrogant pilfering of the public purse. We have been asleep at the wheel for too long in our remote-controlled paradise, and now we do not recognize the true evil in our midst. Wake up!
64
When did the term "capitalists" become a derogatory term? Are we not a capitalist economy? Or is it that those who would prefer a European Socialist type of government working very hard to make it a derogatory term. News flash - it's not just the super-rich who could benefit from some relief from the capital gains tax. Many sell family farms and businesses and are hit very hard.
2
@India The word took on pejorative meaning as a direct result of the behavior of those who practice this religion. Among the many reasons for being deeply skeptical about the motives, intentions, and honesty of the cabal that is now running this country is the obvious point that this scheme ONLY benefits investors and treats the investment incomes of the wealthy much better than the incomes of those who actually spend large portions of their lives working to survive. Of course, therein lies one of the most notorious defects of a capitalist system: it treats wealth better than it does mere humans. Would they support indexing the minimum wages of those who scrape to get by to inflation?
20
Why even bother with the legal charade? Why don't they just back up a truck to the Mint and start shoveling the money in?
44
@sjs
That IS WHAT THEY ARE DOING, only it's electronic. They don't need the truck or the shovel. They've nearly got it all.
And what are you (we) going to do about it? Vote them out? Ha, not if Vladimir & Don (& Facebook!) have anything to say about it.
3
The plan has been clear from the first day that Saint Ronnie declared government is the problem, not the solution. Since that time, every GOP leader has hoped to create such a fiscal disaster that the only solution is to privatize all government functions and shut down social security and medicare. This is only the most recent and blatantly obvious step in a GOP plan that has been refined over the past few decades. They will not stop until our government has been (in the sickening words of Grover Norquist) shrunk to the size where it can be drowned in a bathtub.
622
@James They are deliberately running the ship of state directly into an ice berg and then, as the ship sinks, they will declare: You see, we told you that ship wasn't sound.
2
If only people would read the Republican platform. Eliminating Social Security and Medicare are always on the list.
2
@James,
Thank you for your input, and speaking of Ronald Reagan on an aside, you might want to see 'All The Queen's Horses', a documentary of how a small town in Illinois was embezzled by over $53 million in a span of twenty years by its treasurer; apparently this is happening here and there in our country, but it explains clearly how the piggy bank of a community can shrink, while the one belonging to a happy town camper grows pink and plump, undetected and invisible to the public eye.
Forget what the law is now. If you were starting from scratch, then how would it possibly make sense to tax inflation gains? You buy a stock for $100. Inflation averages 4% for 20 years. At that time the stock is $219 - matching the exact increase in inflation. What right does the government have to tax the "gain" that really isn't a gain and leave you worse off if you sell the stock? Furthermore, by taxing inflation, it gives the government the incentive to increase inflation, which is part of the reason for the total disregard for the national debt from both sides of the aisle.
8
@Marcus
If you bought a stock and 20 years later the stock only broke even when considering inflation, you bought a bad stock.
7
Did you just make that up?
I think we may need to see the passports of posters in the future.
4
@Marcus Yep, you made a bad wager on that particular stock. Pay for your poor betting skills.
Plus, the neoliberal regime is focused on inflation control, as it has been since the 70's and 80's.
3
Brilliant logic. Brilliant reasoning. Brilliant sarcasm.
3
It’s almost certainly illegal until the alt-right Supreme Court says otherwise.
50
I fail to see why any of this surprises any clear thinking person.
Thanks Bernie; any more bright ideas.
Prometheus,
Yes, it was that evil Bernie person. He's to fault for the worlds ills.
Those 1 million Stein voters are to blame.
What...? 7 million DINO's flipped and voted for Trump?
Well...they don't matter. It was those hippies!
What...? Over half of reg. Dem's didn't vote?!
Meh! Its all the fault of them Lefties!
What...? HRC didn't campaign in the contested states and sent surrogates instead, even though the state leaders where begging for intervention and help...!
But, but, bbb...its them!
Its those meddling kids! They are the problem! That old guy made them dislike the queen! Yeah! Its their fault!
Hey, you! Get off my lawn!!!
5
@Dobby's sock
No Bernie No DJT
Thanks Bernie supporters that did NOT vote for HRC. You really showed us with your Yosemite Sam logic. May your student loans haunt you for the rest of your life. God knows, your voting decisions will haunt me the rest of my life, and probably have changed all humanity from bad to worse.
A simple binary choice had to be made and to quote Robert Di Niro, “you blew it”.
http://www.newsweek.com/bernie-sanders-trump-2016-election-654320
This is nothing less than bizarre. Voters, including much of Trump's base, have figured out that the completed tax bill was intended for the rich and not the rest of us.
Moreover, it would seem like a trivial nuance that the capital gains tax adjustment suggestion originated from Trump's administration and not Congress. If Congress were opposed, it would be time to say something and do something. If not, we can assume that ALL Republicans are in favor and just don't care about the 95%. Voters don't vote to obscure nuances and parsed sentences, they vote to reality.
Trump was elected in part as a backlash against the establishment, both Democratic and Republican. It would seem that all Republicans running for Congress in 2018 will be subject to the same kind of backlash as the one that elected Trump.
How is this not obvious as a risk? and in an election year when there is at least a 50/50 chance of Democrats taking the House?
Trump thinks he is immune. He delusionally envisions every encounter as one that he has won or will win simply as a result of being The Donald, King.
9
With money like that, the ultra-rich could pay for Trump’s wall, wipe out the federal deficit and build an actual “summer camp” for all the migrant children who were taken by the government, even putting up the parents at nice hotels. And to fund health care for all.
62
munchkin: how much $ is enough. ( i guess the wife needs new shoes).
82
"One potential sticking point is that Mr. Mnuchin’s proposal may not be, strictly speaking, legal."
If the Trump administration does it ………
10
More of the same from gop greedmeisters.
13
"It’s almost certainly illegal."
"Almost" counts only in horseshoes.
Who controls the courts gets to say what is legal or illegal. And we know who controls the courts, most especially the one that really matters.
69
Trump Economy: If you take out extra government spending, and extra Chinese soybean purchases (to avoid tariffs), the adjusted growth rate is 2.7%. Not 4.1%.
Also Obama had 4 quarters that were all higher than 4.1, contrary to what Trump said.
Even worse, for most Americans, wages are stagnant, and things are getting more expensive.
Even worse, job growth is lower than under Obama.
158
@Proverbs29v12
The economy is largely cyclical. In other words, we are overdue for a recession. Wages aren't stagnant 3% is decent.
Let's curb unfair foreign competition and encourage business and see what happens
@James
Hi. Take the Chinese tariffs for example. We send China worthless pieces of paper and in exchange they give average Americans all the consumer goods they want. How is this unfair? It is an incredibly good deal of historic proportions.
@Proverbs29v12
Top 4 reasons for the 'great' economy mirage:
1) extreme deficit spending:
"Look ma, I borrowed one trillion from China, I'm rich!"
2) reduce corporate tax by one third:
Companies log higher profits (due to lower tax)
3) front-loading:
Distribute or allocate (costs, effort, etc.) unevenly, with the greater proportion at the beginning of an enterprise or process.. Every business had to 'stock up' to ride out the looming disaster (trade war) due to the levying of new taxes (tariff) on the 99%..
4) proprietary trading (Volcker rule repeal).
Reckless trading (gambling) by a few rich guys with FDIC insured depositer's money (privatized profit, socialized losses) is inflating another stock market bubble. The market is not the economy.
The 4.1% is a pretty dismal given the above. I expected over 5%. Doing nothing at all since January 2017 would have produced numbers like this even if puttin-puppet had done nothing at all.
7
Spot-on!
Crony capitalism is at the very root of democracy's current problems, all around the globe. If we don't correct the increasing wealth inequality caused by capitalist corruption, there are going to be civil wars.
92
@SalinasPhil You missed something Phil, there ARE civil wars going on all over the globe. The root, inequality and greed! Just hasn't got HERE yet!
11
@Norman Good point, thanks.
@SalinasPhil
Who is going to correct this? The mainline, "corporate" Democrats as exemplified by Hillary? Two sides of the same coin here....
This is what happens when votes are counted in secret. We end up with a party that does not reflect the will of the American people. The approval rating of the Republican Congress is in the single digits. The GOP’s base is shrinking. A majority of Americans support progressive policies. Yet, Republicans hold the largest majorities at the state and national level not seen since the 1920s.
This is not what democracy looks like:
The American people have no way of verifying election results. The system been set up for concealment. Our votes are counted by private right-wing companies with “proprietary” software. Computer experts have proven over and over that electronic voting machines can be easily hacked and manipulated by insiders without leaving a trace.
Hacking Democracy - The Hack https://tinyurl.com/y7c9oopu
The Emmy nominated HBO documentary https://tinyurl.com/y7mydv7z
This is what democracy looks like:
Harper’s Magazine: How to Rig an Election https://tinyurl.com/y9xx63f6
"It is Germany that has now become the standard-bearer for clean elections. In 2009, that nation’s constitutional court upheld the basic principle of the public nature of democratic elections. By ruling that the vote count must be something the public can authenticate—and without any specialized expertise—the decision directly challenged the use of computers in elections.”
Europe Rejects Digital Voting Machines https://tinyurl.com/yczjwo64
#HandCountedBallotsNow! It’s the gold standard.
182
There used to be concern about the vulnerabilities with computerized voting, but it became taboo to talk about it.
- NYT: Computer Voting Is Open to Easy Fraud, Experts Say
- Washington Post: [Md. Governor] Ehrlich Wants Paper Ballots for Nov. Vote
- WSJ: Reversing Course on Electronic Voting
- NPR: The Approaching 2006 E-Voting Train Wreck
Election Theft in the 21st Century with Jonathan Simon https://tinyurl.com/ydz3jcvj
“The idea that we have an unobservable vote-counting system should strike people on its face as insane.”
Josh Mitteldorf: Intro to Election Theft in America (part 1 of 4)
https://tinyurl.com/yanc473c
“Are votes in American elections being counted fairly and accurately? In an open democracy worthy of the name this should not be a question for forensic science, but in 21st century America that's just what it is. The US is unique in the developed world in counting votes with proprietary software that has been ruled a trade secret, not open to inspection even by local officials whose responsibility it is to administer elections.
“There is stiff resistance to looking at the ballots. So we are left looking at statistics and anecdotes, trying to determine whether vote counts are honest and reliable. The evidence does not inspire confidence. But whatever you think of the evidence there is no justification for a system without public verification.”
Joseph Stalin: “The people who cast the votes decide nothing. The people who count the votes decide everything."
29
@RLS From a 7/13/18 AP story: A vendor that provides key services for Maryland elections has been acquired by a parent company with links to a Russian oligarch, state officials said Friday after a briefing a day earlier from the FBI.
8
@RLS
“Yet, Republicans hold the largest majorities at the state and national level not seen since the 1920s.”
Yes, and do remember (or google, if you are too young to know) what the 1930s looked like. Bread lines, anyone?
3
I don't think Congress would have any problem with Trump usurping their authority to levy or lighten taxes on certain individuals. On second thought, why not just transfer $100 billion to Vladimir Putin? Anyone have a problem with that? Nobody? OK, it's a done deal!
24
If you assume (rightfully, I think) that the Republicans' claims not to believe in climate change are wildly insincere, then their desperate attempts to amass as much wealth as possible make a certain kind of sense. How else are they going to buy private islands to hide from the millions of refugees caused by their destruction of the entire planet if they don't amass wealth now?
If these plutocrats aren't careful, the masses may choose to re-define not the word "cost" but the word "millionaire," redefining it as someone who deserves to be thrown in jail or worse. Mnuchin and his status-oriented wife are exactly the kind of people that the French Revolution targeted. He might want to keep that in mind.
106
There was, as most will remember, once a time when the Republican party was dominated by fiscal conservatives and deficit hawks. Now, it seems, cavernous deficits don't matter and the GOP is led by a team that touts the snake oil of "trickle-down economics," a fantasy that has been proven by every rational, non-partisan, fair-minded economist and economic historian from the days of David Stockman/Ronald Reagan until today to be a failure. Sure, it may sound good to think that "job creators," given a fiscal shot in the arm, will spend that money on increased business investments that result in job opportunities for the middle class (and below), but repeated experience has shown it to simply not have been the case.
The Trump administration's America-weakening fiscal policy seems almost to be calculated to burden us with debt, widen the gap between the rich and the poor, and force us into draconian budget cuts in the not-so distant future. But ... hmm ... perhaps that's been the plan all along — to not only achieve entitlement cuts that please Paul Ryan, but also to divide and weaken America, thus pleasing Vladimir Putin.
71
@Rik Myslewski I agree with you 100% and will only add that you can change the phrase "seems almost to be" to "is."
3
Drain the Swamp, indeed!
15
Trump voters won't care about Trump's latest "heist". Oh, sure, they'll be more likely to be harmed by this move designed to gut the public coffers, but they really don't care. They don't mind living off the largesse of the Blue states' tax revenues, and fiscal responsibility has never been in their lexicon. They're a net financial drain on this country, and they know it.
But why do Trump voters continue to look the other way? Because they made a pact with the Devil, and so far, the Devil has kept his end of the bargain. Trump voters wanted only one thing from him -- to be a "president" who tells them that as whites, they're superior to the rest of us, and only their rights matter.
This latest "unilateral" tax cut could cause millions of Trump voters to lose Medicare and Social Security benefits. Let me repeat. They don't care. Even though the decision would be entirely Trump's, they will continue to spout the lies that Democrats, or Obama, or Hillary, or Bernie, or Liz is really to blame... These voters aren't ignorant. They know Trump is lying to them. And by now, they know they're lying to themselves.
But they need to understand that the rest of us see them for who they really are. A group of people who are happy to see this nation turn into an ignorant, racist backwater of a country, where only the very rich can live decent lives. This is the deal they'll make every time, so long as their "president" tells them that as whites, they're the "real Americans".
1250
@Henry Hurt . Trump's "base" has decided we should all commit suicide, and we DON'T live in a democracy!
3
@Henry Hurt, I think you're giving them too much credit. I think they are really that stupid.
8
@Henry Hurt. Well, that southern strategy worked before didn't it?
5
When you exist in a netherworld of fallacy where tax cuts always pay for themselves, and where "It's very hard not to give tax cuts to the wealthy" ... its a no-brainer ....
15
I don't know why United States citizens put up with this behavior by the Republican Party and this administration. Self-dealing to a fault, Trump and his cronies are openly looting the treasury and screwing 90% of the citizens and taxpayers. Are Americans so blind that they are willing to become serfs in a feudal state? It's just unbelievable.
307
@Larry Bennett
Yes, to answer your (rhetorical?) question, but only about 40% or so...
2
@Larry Bennett. The blue Wave is coming. Change, massive change, is in the air.
3
It may be legal or it may not. If Congress has any cause for input, they will back Trump. If the judicial branch gets involved it will go to SCOTUS with Trump's guy the deciding vote. It's almost like Trump planned it.
35
@Mark Duhe -Please stop saying "Congress". The correct phrase is "the Republican majority in Congress". Thank you.
1
This was always the GOP plan to "Starve the Beast"
https://en.wikipedia.org/wiki/Starve_the_beast
23
Trump personally has nothing to lose; I just read another detailed expose on his supporters in Florida who claim that they will stand by him no matter what he does. And he knows it, and is prepared to personally profit from it.
110
I don't know why Republicans in Congress would blink at making this law. Some of their "base" sell their homes for a gain and have 401Ks that might benefit a few dollars of tax savings when they cash out. In other words, just enough crumbs for the middle class to convince them it's all being done for them. Of course, the best part is "starving the beast" by another $100 billion so that they can build their case for cutting Social Security, Medicare and Medicaid.
62
As a CPA who specializes in tax, I feel the need to address two issues in your post. First, gain on the sale of a principal residence (home) is only taxed on the amount of gain over $250,000 (single) or $500,000 (married). So for most of Trumps base, it’s all non-taxable. And second, 401(k) accounts don’t get capital gain treatment. The full amount distributed is taxed at ordinary income rates. Again, not a real benefit for the base.
This is for the donor class.
480
I think you’re misinformed about tax law. Read Paul Mueller’s response above. The 401(k) treatment is completely unaffected. And the 500,000 exclusion on gains on a principle residence for a couple eliminates any benefit for almost anyone in the middle class.
14
@Paul Mueller Thanks for the tax information. It's worse than I thought. It would have been a stronger editorial if the NYT board had included your information.
If Trump is indeed behind this move, I submit that his motivation is to pack as much self-dealing and Trump-friendly moves as he can into the next few months. Why the rush? Because he intends to declare complete victory and quit before the Mueller inquiry is finished. You know, to spend more time with the family.
253
@Rob. Who will clean up his MESS or even wants to?
Trump is planning to become a golf pro! He does not like hard work, long hours, more than 10 minute meetings, or getting to the office before eleven o’clock. Perfect profession for Captain Bone Spur!
1
@Rob
Trump is too stupid to have figured this one out. Mnuchin, who worked as a Wall Street scam artist before being appointed to Treasury, is the likely author of the graft — although he probably ran it by Trump before making the plan public.
2
@Rob
I hope you're right! When you put it that way, it sounds almost worth it.
The alternative is that he simply refuses to leave office, regardless of the results of elections and the Mueller inquiry.