The Trump White House is publicly advocating a massive tax cut for wealthy U.S. investors while simultaneously urging Congress to pare back the expanded unemployment benefits currently serving as a financial lifeline for more than 30 million—and counting—jobless Americans.
“Regarding the ‘capital gains holiday,’ remember this key stat: 82% of all capital gains tax is paid by the richest 1%. A capital gains tax holiday is a pure giveaway to the rich.”
—Michael Linden, Groundwork Collaborative
In an interview on Fox Business Monday, White House economic adviser Larry Kudlow said President Donald Trump wants included in the next Covid-19 stimulus package “a payroll tax holiday”—which critics warn is a stealth attack on Social Security—and a reduction in the capital gains tax.
Slashing the capital gains tax is a longtime goal of congressional Republicans and Trump, who last year considered but ultimately abandoned a legally dubious plan to lower the tax with an executive order.
While stressing that formal talks with Congress on the next stimulus package have not yet begun, Kudlow said the administration is also pushing for “reforms” to the $600-per-week boost in unemployment insurance (UI) payments, which he characterized as excessively generous “disincentives” to work.
The benefits are set to expire at the end of the month without action from Congress.
White House economic advisor Larry Kudlow says a “capital gains holiday” and a “payroll tax holiday” are possible items the Trump administration wants for a new round of virus stimulus. Many of these measures would benefit the extremely wealthy during high unemployment. pic.twitter.com/pvWqfBryfw
— The American Independent (@AmerIndependent) July 13, 2020
“So the White House position is that we have to cut the incomes of 30 million people who lost their jobs or who lost hours, while also giving a giant tax cut to the biggest corporations and the richest people in the world,” tweeted Michael Linden, executive director of the Groundwork Collaborative, a progressive think tank.
“Regarding the ‘capital gains holiday,’ remember this key stat: 82% of all capital gains tax is paid by the richest 1%,” Linden added. “A capital gains tax holiday is a pure giveaway to the rich.”
The Washington Post reported Tuesday that after previously urging complete expiration of the enhanced unemployment benefits, “Trump administration officials have begun opening the door to accepting a narrower version of what Congress previously approved.”
“One potential compromise discussed by Republican lawmakers would involve cutting the unemployment benefit from $600 per week to between $200 and $400 per week and making up at least part of the difference by sending another round of $1,200 stimulus payments,” the Post reported.
Trump spokesman Judd Deere told the Post that the White House is open to approving a reduction in the current weekly UI payments but remains opposed to extending the full $600-per-week.
“UI reform is a priority for this White House in any phase four package and we are in ongoing discussions with the Hill,” said Deere.
— Ending UI increase would cut *by 50-75%* the incomes of +30 million
— Millions on UI will ALSO be newly vulnerable to eviction
— We risk a simultaneous wave of small business failures
— Senate comes back July 20 – 5 days before UI benefits expirehttps://t.co/weoBSV4UGV
— Jeff Stein (@JStein_WaPo) July 14, 2020
Julia Wolfe, state economic analyst with the Economic Policy Institute, warned in a blog post last week that if Congress fails to extend the enhanced unemployment benefits through next year, “it could cost us more than five million jobs and $500 million in personal income.”
“We should despair for the millions who have lost their jobs and for their families,” Wolfe wrote, “and our top priority as a country should be protecting the health and safety of workers and our broader communities by paying workers to stay home when possible, whether that means working from home some or all of the time, using paid leave, or claiming UI benefits.”