Trump Says He Has Authority to Reduce Capital Gains Taxes

[Belsnickel]

Remember that populist presidential candidate who understood the working class? Was going to Washington to "drain the swamp" and rein in the bloated debt?

https://www.nytimes.com/2019/08/20/business/trump-capital-gains-taxes.html

Quote:WASHINGTON — President Trump said on Tuesday that he was considering giving investors a big tax cut that would primarily benefit the rich, and that he believed he could do it without approval from Congress.

Speaking at the White House, Mr. Trump said that the majority of his economic advisers supported the idea of reducing taxes on profits that investors earn when selling assets like stocks or bonds. This would be done by indexing capital gains to inflation, which the president believes could be accomplished with his executive authority.

“We’ve been talking about indexing for a long time,” Mr. Trump said. “And many people like indexing; it can be done directly by me.”

He added, “I would love to do something on capital gains.”

Economists estimate that such a move would add $100 billion to the national debt. It would also provide the greatest benefit to the top 0.1 percent of taxpayers, according to an analysis by economists at the Penn Wharton Budget Model.

I think he is concerned about the signs pointing to a recession and he is trying to do things that his advisers are saying will stave off an economic downturn.

[CJD]

Alternatively, he can just end the trade war that is, in large part, causing the fear of recession in the first place...

[Belsnickel]

(08-21-2019, 08:51 AM)Crazyjdawg Wrote: Alternatively, he can just end the trade war that is, in large part, causing the fear of recession in the first place...

The trade war will only exacerbate a recession, but the recession will come, regardless.

[Benton]

It's still amazing that four decades later anyone believes in trickle down economics. But I guess it shouldn't be. It does work for those making policy as they don't have to live with the consequences.

[CJD]

(08-21-2019, 09:12 AM)Belsnickel Wrote: The trade war will only exacerbate a recession, but the recession will come, regardless.

I'm not an economist, so I cannot speak in absolutes, or even with relative confidence in what the signs of the recession mean.

But it seems like it can be avoided. I am not sure if the predictions regarding Trump's tax cuts being a sugar high are partially to blame or if the trade war is the key thing or if there is another factor that is creating this fear of recession. But I can't help but think that, if economists are seeing the signs of a recession, there is time to counteract them. 

The Trade War seems like the most direct cause. And as far as I can tell, it hasn't even yielded anything positive for the U.S. I've heard reports of it devastating a lot of people, particularly farmers. So the simplest course of action seems, to me, to be just ending the trade war.

And the craziest thing is that if Trump did end the trade war, I think it would actually improve his odds of winning in 2020 by a ton. Right now, basically the only thing Trump can hang his hat on is a strong economy. He has failed to enact many of the major policy changes that he promised, such as repealing Obamacare, repealing DACA, significant tax cuts for the middle class, building a wall on Mexico's dime, ending birthright citizenship, initiating a big bill for infrastructure, enacting term limits for Congress, renegotiating the Iran Deal etc.

His major wins have been the Supreme Court, significantly hurting ISIS, his stance on NATO (arguably. It's in the works) and the economy. So it's in his best interest to not lose the economy...

[GMDino]

I heard a stat on the radio this morning that something like 70% of the economic upturn has come from consumer spending.  

That cannot be maintained.  Businesses are going to have to start spending.

I can tell you that if there is a cut in the payroll tax I'd probably use it to pay down debt rather than spend more.

[Benton]

(08-21-2019, 09:29 AM)Crazyjdawg Wrote: I'm not an economist, so I cannot speak in absolutes, or even with relative confidence in what the signs of the recession mean.

But it seems like it can be avoided. I am not sure if the predictions regarding Trump's tax cuts being a sugar high are partially to blame or if the trade war is the key thing or if there is another factor that is creating this fear of recession. But I can't help but think that, if economists are seeing the signs of a recession, there is time to counteract them. 

The Trade War seems like the most direct cause. And as far as I can tell, it hasn't even yielded anything positive for the U.S. I've heard reports of it devastating a lot of people, particularly farmers. So the simplest course of action seems, to me, to be just ending the trade war.

And the craziest thing is that if Trump did end the trade war, I think it would actually improve his odds of winning in 2020 by a ton. Right now, basically the only thing Trump can hang his hat on is a strong economy. He has failed to enact many of the major policy changes that he promised, such as repealing Obamacare, repealing DACA, significant tax cuts for the middle class, building a wall on Mexico's dime, ending birthright citizenship, initiating a big bill for infrastructure, enacting term limits for Congress, renegotiating the Iran Deal etc.

His major wins have been the Supreme Court, significantly hurting ISIS, his stance on NATO (arguably. It's in the works) and the economy. So it's in his best interest to not lose the economy...

Recssions are an eventuality. They can't be avoided, but they can be extended, shortened or minimized depending on policy and market reactions. 

[*PhilHos*]

(08-21-2019, 01:36 PM)Benton Wrote: Recssions are an eventuality. They can't be avoided, but they can be extended, shortened or minimized depending on policy and market reactions. 

And, yet, people still blame/credit the President for being in a recession or getting out of one. 

[Belsnickel]

(08-21-2019, 02:55 PM)PhilHos Wrote: And, yet, people still blame/credit the President for being in a recession or getting out of one. 

There are lots of things people lay at the feet of a POTUS that they don't have much to do with.

[GMDino]

(08-21-2019, 01:36 PM)Benton Wrote: Recssions are an eventuality. They can't be avoided, but they can be extended, shortened or minimized depending on policy and market reactions. 

(08-21-2019, 02:55 PM)PhilHos Wrote: And, yet, people still blame/credit the President for being in a recession or getting out of one. 

The POTUS is not completely at fault or completely free of fault.   

[*PhilHos*]

(08-21-2019, 03:03 PM)Belsnickel Wrote: There are lots of things people lay at the feet of a POTUS that they don't have much to do with.

Probably something most of us on here can agree.

I blame Obama. 

(08-21-2019, 03:08 PM)GMDino Wrote:

The POTUS is not completely at fault or completely free of fault.   

True, but the POTUS gets FAAAAAAAAAAAAAAAAAAAR to much credit/blame for things like this.

[Belsnickel]

(08-21-2019, 03:18 PM)PhilHos Wrote: Probably something most of us on here can agree.

I blame Obama. 

Until it benefits them to not agree with it.

[GMDino]

(08-21-2019, 03:18 PM)PhilHos Wrote: Probably something most of us on here can agree.

I blame Obama. 


True, but the POTUS gets FAAAAAAAAAAAAAAAAAAAR to much credit/blame for things like this.

Some of them take far too much credit too. 

[*PhilHos*]

(08-21-2019, 03:27 PM)GMDino Wrote: Some of them take far too much credit too. 

You're talking about Trump, aren't you?

[Benton]

(08-21-2019, 02:55 PM)PhilHos Wrote: And, yet, people still blame/credit the President for being in a recession or getting out of one. 

Directly, agreed.

Indirectly is a little different. The POTUS appoints a number of people who impact the government's effect on a recession. They can and do directly impact the economy. And we haven't really had the issue until Trump, but what a president says does impact markets. The usual fluffy talk of 'the economy is strong' or 'American businesses are going strong' doesn't do much, but toss out terms like 'trade war' or 'tariffs' and the market will respond. Along the same line, ignoring warning signs can make markets concerned, as is part of what's happening now as the administration plays off fears of a recession

[JustWinBaby]

If there's a recession before 2020, he's done. Shockingly, Trump is smart enough to know it.

Payroll taxes are already too low, so that's dumb. And cutting interest rates only works in the short-term.....longer you start punishing savers (especially retirees). So also very dumb.

Lots of opportunity for tax reform.....but it usually comes down to expanding the base and reducing fraud. And politically that doesn't work well for either party.