TOPLINE
White House economic advisor Larry Kudlow and Treasury Secretary Steven Mnuchin said Wednesday that President Trump is considering legislation to cut income and capital gains taxes, hitting former Vice President Joe Biden and Sen. Kamala Harris (D-Calif.) as “tax raisers.”
WASHINGTON, DC - JULY 02: U.S. Treasury Secretary Steven Mnuchin speaks to the media while flanked ... [+]
KEY FACTS
Mnuchin told Fox Business on Wednesday, “The president would like to do capital gains tax, and we do need legislation to do what we want on that front."
“We are looking at middle class income tax cuts and capital gains tax cuts to spur investment and jobs and liquidity,” Kudlow told reporters outside the White House.
But Kudlow also echoed Treasury Secretary Steve Mnuchin that Trump would not attempt to institute those cuts through an executive order, adding, “This is just something we’re looking at closely.”
Kudlow lauded Trump as a “tax cutter,” which he claimed is in “direct contrast” to Biden and Harris, repeating Trump’s claim on Tuesday that they would raise taxes.
“The Biden/Harris team is proposing a 50% capital gains tax rate,” Kudlow claimed, which he said “would get you a stagnant economy for as far as the eye can see” (Biden’s tax plan would raise capital gains taxes to 39.6%, according to the Tax Foundation).
“We’d like to take it back to 15% where it was for a long time,” Kudlow added, asserting that such a cut would “help jobs, investment, productivity and wages” and “get you a roaring recovery.”
Key Background
Trump has long sought to boost the American economy – brought to heel by the coronavirus pandemic – through tax cuts. Most notably, his administration has frequently proposed a cut to payroll taxes, despite bipartisan opposition. But Trump’s most recent proposal for a “permanent” payroll tax cut was swiftly walked back a day later after critics of the administration raised concerns about potential cuts to social security.
Big Number
32.9%. U.S. gross domestic product, an indicator of economic activity, had its largest drop ever in the second quarter of 2020. According to the Commerce Department, the nation’s GDP shrank by 32.9% as a result of the coronavirus pandemic. Charles Evans, the president of the Federal Reserve Bank of Chicago, said Sunday that the actual U.S. unemployment rate is “undoubtedly” higher than the reported 10.2%.
What To Look For
“Structural changes to tax rates… will likely require congressional legislation,” Kudlow said. But unlike with Trump’s 2017 tax plan, the House is now controlled by Democrats. Trump would likely struggle to usher tax cutting legislation which would satisfy enough Democrats to pass both chambers.
