Business Report: A proposal to further cut taxes on the rich

Business Report: A proposal to further cut taxes on the rich

HONOLULU (HawaiiNewsNow) - Treasury Secretary Steven Mnuchin says his department is looking at it – a proposal to start indexing the capital gains tax for inflation. Dialing out inflation would reduce the capital gains tax. And Mnuchin says he's trying to figure out if he can do it administratively, without Congress.

Suppose an investor spent $100,000 on stock in 1980, then sold it now for $1 million.  This investor would be taxed on a $900,000 gain, simple arithmetic, but...

With indexing for inflation, that is, dialing inflation OUT, the gain is only $700,000, so the investor is taxed on a smaller amount. What's wrong with this is, you're paying the capital gains tax in dollars that have NOT been indexed. The individual value of those dollars were ALSO hit by inflation. So this proposal is another giveaway to the rich, the one part of society that doesn't need it.

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