U.S. President Donald Trump is well known at this point to have filled his inner national security and global policy circles with those who support his antagonistic ambitions. He has also, however, packed the ranks of the nation’s economic officials with those who support his economic vision to support individuals like himself.
Secretary of the Treasury Steven Mnuchin revealed recently that his department is looking into whether or not they can sidestep Congress and impose a $100 billion tax cut all on their own that would mostly favor the super rich.
‘If it can’t get done through a legislation process, we will look at what tools at Treasury we have to do it on our own and we’ll consider that. We are studying that internally, and we are also studying the economic costs and the impact on growth.’
The cut would allow capital gains earners to adjust the original price of an asset for inflation when determining how much of their “gains” from selling should be scooped up in taxes. That would shrink the difference between original price and current selling price immensely and take more money away from the government and into the upper classes’ pockets. Over ten years, the government would take in $102 billion less than it would otherwise, the University of Pennsylvania’s Wharton School of Business says.
That shift would come while the government continues to languish under familiar issues of massive budget deficits and the like. Months after Trump signed a massive tax cut bill into law, the deficit is expected to hit $1 trillion just next year, while taxes collected from corporations have fallen to a 75 year low. If enacted, Mnuchin’s cut would heighten the precarious position that the government is in.
Senate Democratic leader Chuck Schumer of New York is among those thoroughly unimpressed.
‘At a time when the deficit is out of control, wages are flat and the wealthiest are doing better than ever, to give the top 1 percent another advantage is an outrage and shows the Republicans’ true colors. Furthermore, Mr. Mnuchin thinks he can do it on his own, but everyone knows this must be done by legislation.’
There’s actually a specific precedent for the move the Trump administration wants to take, and it doesn’t end well. The George H.W. Bush administration explored the possibility of redefining the original cost of an item according to the relevant law to include adjustments for inflation — and they found that move to be illegal.
In the time since, though, conservative activists have continued to push for the move. Americans for Tax Reform head Grover Norquist insists that there could be a “huge” economic boost via the cut because the super rich would have more money to spend — but that sort of prediction rarely if ever comes true. He claimed the same boost that never showed to be on the way after the tax cuts Trump signed into law late last year.
As time goes on and those promises remain unfulfilled, Trump continues to serve the rich of the United States with his economic policies.
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