A group of over 20 Republican senators on Monday urged President Donald Trump’s Treasury Department to bypass Congress to unilaterally hand the wealthiest Americans another massive tax cut.
In a letter (pdf) led by Sen. Ted Cruz (R-Texas), the GOP senators called on Treasury Secretary Steven Mnuchin to index capital gains to inflation, a move that would primarily reward rich investors.
According to Bloomberg, the Trump White House is “developing a plan” to cut taxes for the rich by indexing capital gains to inflation.
“Indexing capital gains 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,” Bloomberg reported last month.
The Republican senators called on Mnuchin to use his “authority to eliminate inflationary gains from the Department of the Treasury’s calculation of capital gains tax liability.”
Critics have questioned whether the White House has the authority to take such an action. As the New York Times reported last July—when the Trump administration first considered going around Congress to index capital gains to inflation—former President George H.W. Bush’s Treasury Department determined the move “would be illegal.”
Chye-Ching Huang, director of federal fiscal policy at the Center on Budget and Policy Priorities, said Monday that 86 percent of the benefits of indexing capital gains to inflation would go to the top one percent.
The GOP push for more tax cuts for the rich comes as the Trump administration is working to take food stamps from three million low-income Americans, Seth Hanlon, senior fellow at the Center for American Progress, noted on Twitter.
The Republicans sent their letter as mounting data shows Trump’s $1.5 trillion tax cut legislation, which took effect last year, has done virtually nothing for workers while further enriching wealthy Americans and large corporations.
Earlier this month, a group of Democratic lawmakers led by Sen. Sherrod Brown (D-Ohio) sent their own letter (pdf) pressing Mnuchin to “reject reported plans to use questionable authority to—yet again—lavish tax cuts upon our country’s wealthiest, while middle class families and working people continue to see costs rise and wages stagnate.”
The letter was signed by Sens. Ron Wyden (D-Ore.), Jeff Merkley (D-Ore.), Bernie Sanders (I-Vt.), and a dozen other senators.
“We remain concerned this administration’s relentless preoccupation with cutting taxes for our country’s wealthiest taxpayers while leaving behind middle class families and working people,” wrote the senators, “even to the extent that it would consider exceeding its legal authority to do so.”