Republicans’ Latest Proposed Tax Cut For the Rich Could Permanently Hobble Future Presidents

In Budget, Economy, Taxes On
- Updated

May 26, 2020 at 12:36 a.m. GMT+2

At this point it’s almost a pathology. Whatever the crisis, whatever the state of the economy, Republicans crave another tax cut for the rich.

The latest proposal is for a temporary “holiday” on capital gains taxes, as White House adviser Kevin Hassett pitched Sunday on CNN and President Trump had earlier proposed via tweet. A one-time, temporary capital gains tax holiday would do little to stimulate the economy, even according to the GOP’s usual line that tax cuts goose growth. The move could, on the other hand, permanently hobble the ability of future presidents to fund the government.

A “capital gain” refers to how much the value of an asset (such as a stock) has increased over time. Taxes on capital gains are triggered only when the asset is sold. So if you bought a few shares of Apple stock when it IPO’d in 1980, your shares would be worth a fortune today — but you don’t owe Uncle Sam a penny until you cash out.

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