Paul L. Caron

Wednesday, May 6, 2020

NY Times: Trump Eyes New Tax Cuts For Next Stimulus Package

New York Times, Trump Eyes New Tax Cuts for Next Stimulus Package:

The Trump administration is considering a wide range of tax-cut proposals for businesses and investors in the next coronavirus response bill as it tries to shift from government spending programs to support the economy toward measures that aim to reinvigorate growth.

The list of ideas under discussion includes a reduction in the capital gains tax rate and measures that would allow companies to deduct the full costs of any investments they make now or in the future, according to administration officials and several outside experts who have discussed plans with the White House.

Those proposals, which are still being debated and are not final, could accompany President Trump’s top two priorities for the next rescue package: the suspension of payroll taxes for workers and an expanded deduction for corporate spending on meals and entertainment. ...

Some of the administration’s proposals have been disclosed publicly by officials, while others have been discussed internally and with outside advisers. The president mentioned several of them — including a possible elimination of all capital gains taxes — in a Twitter post on Tuesday afternoon, which also attacked Democrats’ push to send aid to cities and state governments. ...

None of the plans are likely to find favor with congressional Democrats, who are pushing instead for additional support for Americans who have lost their jobs as the pandemic plunges the country into recession and for hundreds of billions of dollars in federal assistance to struggling state and local governments to prevent layoffs of teachers, police officers and other government workers. ...

“‘No more spending’ has really become the rallying cry of the right,” said Stephen Moore, an informal adviser to Mr. Trump who is the president of the Committee to Unleash Prosperity, which has pushed governors and other officials to ease restrictions on restaurants, bars and other businesses. “We’ve done the spending, it didn’t work, and now we need to try something else. There is going to be civil war in Congress over this.”

For complete TaxProf Blog coverage of the coronavirus, see here.

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The people that pay payroll taxes pay them because they have a job. It is those without jobs - that lost them because of the pandemic - that need help. None of them would benefit from a payroll tax cut. Moreover, the payroll taxes are supposed to pay for social security and Medicare - isn't this just going to put a deficit in those programs?

Posted by: Cletus | May 6, 2020 2:20:10 PM

Lower taxes on capital gains? When the Treasury is shoveling money out the door and the already-high deficit is headed far higher? When there's more sentiment than ever for equalizing taxes on capital gains and wages?

Ah yes: as Dean Baker regularly says, "The rich always need tax cuts".

Posted by: Gerald Scorse | May 7, 2020 9:45:12 AM