Trump White House officials have reportedly figured out a new way to give wealthy Republican donors a big tax cut ahead of the 2020 election — and they won’t even need Congress to approve it.
Bloomberg reports that Trump officials are plotting a new executive order that would result in a cut to the capital gains tax, which largely benefits wealthy investors.
The cut would come in the form of indexing capital gains to inflation, which Bloomberg writes would “slash tax bills for investors when selling assets such as stock or real estate by adjusting the original purchase price so no tax is paid on appreciation tied to inflation.”
This change would also disproportionately benefit the wealthy, the report explains.
“Most of the benefits would go to high-income households, with the top 1% receiving 86% of the benefit, according to estimates in 2018 by the Penn Wharton Budget Model,” Bloomberg says. “The policy could reduce tax revenue by $102 billion over a decade, the model found.”
The rule change will likely spark legal challenges that the White House is overstepping Congress’s authority to control taxing and spending, however, although the White House is calculating that it will still be a net political benefit heading into an election year.