Tax Cut Backers Unhappy That Cap Gains Provision Means Some Must Pay More
As major reform bills go to conference committee, advocates worry some hikes will survive
Congress is moving steadily toward passage of a Republican tax reform bill that President Donald Trump almost certainly will sign when it reaches his desk, but tensions remain among advocacy groups seeking to drain the Washington swamp, thanks to a provision on the “death tax.”
Senate and House conferees are ironing out differences between their chamber’s respective tax reform versions, a process made more difficult as specific details of the measures become known.
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Trump promised that most taxpayers would benefit from the biggest tax cuts since the Reagan cuts of 1981 and 1986, but critics are finding provisions that don’t measure up.
“The Republican tax bill will raise, not lower, your capital gains taxes,” wrote Phil DeMuth in a December 4 Forbes column. “It also promotes mutual fund companies at the expense of individual stockholders.”
DeMuth wrote that the bill will make it harder for individual investors to minimize their tax liabilities when selling investments that have appreciated in value. Called “first in, first out,” the provision is opposed by Grover Norquist, president of Americans for Tax Reform, who told LifeZette Monday that he still favors the overall tax package.
Norquist noted that the Republican tax plan also keeps some old policies from President Barack Obama’s tenure. “We didn’t get rid of the tax increase that Obama imposed on capital gains,” said Norquist.
Still, while the individual capital-gains tax rate is 23.8 percent, the corporate capital gains rate is 35 percent. Corporations will see that drop to 20 percent under the GOP tax plan, something Norquist says will promote dynamic economic growth and investment.
“You’re going to see an incredible unleashing of potential,” said Norquist.
When asked by this LifeZette writer at Monday’s press briefing if Trump will sign the tax bill even if there are some tax increases in it, White House press secretary Sarah Huckabee Sanders said the president’s priority is middle-class tax relief, business stimulation, and tax-code simplification.
Norquist said the Republican-led Congress is doing the right thing by beginning the tax reform process, and can take another swing at deeper reform next year.
“It’s going in the right direction,” said Norquist. “It will be a tax cut. This is step one.”
(photo credit, homepage image: Mitch McConnell, CC BY-SA 2.0, by Gage Skidmore / Donald Trump, CC BY-SA 2.0, by Gage Skidmore / Grover Norquist, CC BY-SA 2.0, by Gage Skidmore; photo credit, article image: Mitch McConnell, CC BY-SA 2.0, by Gage Skidmore / President Donald J. Trump…, CC 0, by Sgt. Amber Smith / Grover Norquist, CC BY-SA 2.0, by Gage Skidmore)