President Donald Trump has reportedly said he is thinking “very strongly” about indexing capital gains to inflation. The executive action would likely come by way of Treasury regulations.
Indexing Capital Gains
Treasury Secretary Steven Mnuchin said in August that Treasury is currently studying whether the administration could act without Congress on indexing capital gains. However, the Trump administration has not yet taken an official policy position on the capital gains issue, according to the White House. “No administration policy has been determined but the president has asked the Treasury Department to take a look into it,” White House Press Secretary Sarah Huckabee Sanders told reporters in August
The long-debated and controversial topic of indexing capital gains to inflation is largely supported by Republicans while criticized by Democrats. Indeed, it has been a reoccurring subject of debate among Congress and the executive branch since the early 1990s.
Currently, Democrats are criticizing the possible unilateral move by the Trump administration for being an unprecedented change aimed to primarily benefit the wealthy. Treasury has not yet announced whether it has the authority to make the change unilaterally.
There have been several legislative proposals to index capital gains introduced this year in Congress. However, these legislative efforts are not expected at this time to be approved. House Ways and Means Committee Chairman Kevin Brady, R-Tex., has indicated that the issue, although being discussed among lawmakers, is not likely to be included in the Tax Reform 2.0 package expected to be released in early September.
Jessica Jeane, Senior News Editor