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Indexing capital gains to inflation. Who knew those five words could make me so angry? But I finally was able to put my finger on where my low simmer of anger all day has come from...Surprise surprise, it's from Donald Trump. Again. Let me explain. (1/n)
Yesterday, Donald Trump proposed cutting taxes – for the rich – by indexing capital gains to inflation. And it's not the first time he's floated the idea. Why is it an idea that is sticking around? What does it mean? nytimes.com/2019/08/20/bus… (2/n)
Let's start with what "capital gains" are: They are the profits that investors make on assets like stocks & bonds. Say you bought a stock for $10k in 2009 and you sell it for $50k in 2019. Your capital gains is $40k and you are taxed on that $40k. (3/n)
But, right now, capital gains are taxed at a lower rate than normal income. The highest capital gains rate is 20%, even if your income puts you in the top tax bracket. So already, profits made on playing the stock market get preferred treatment over income you work for. 🤔 (4/n)
(And, a quick aside: let's remember that nearly all stocks – 84 percent – are owned by the richest 10 percent of Americans. So it's just a small sliver of the population that gets this preferential treatment.) nytimes.com/2018/02/08/bus… (5/n)
And now Trump wants to give that small sliver of the population (people like Jeff Bezos, Bill Gates, Mark Zuckerberg, and the Trump family) a giant unneeded tax cut by indexing capital gains to inflation. (6/n)
We covered capital gains. What does "indexing to inflation" mean?

It means being able to adjust the cost of your initial investment to the rate of inflation. So, as the buying power of a dollar decreases, you can account for that in the amount of profit you see. (7/n)
Say you bought stock in 2009 for $10k and sold it in 2019 for $50k, but, due to inflation, $10k in 2009 is equivalent to $15k in 2019. Trump's plan means that the amount of profit you made is $35k, instead of $40k. So you would only pay taxes on the $35k, not the full $40k. (8/n)
This continues to reduce the amount of $$ the government can raise, on top of the $1.5 trillion the #GOPTaxScam squeezed from our country. That threatens funding for things that people rely on. ALL 👏 SO 👏 THE 👏 RICH 👏 GET 👏 A 👏 TAX 👏 CUT 👏 THEY 👏 DON'T 👏 NEED 👏 (9/n)
Today, Trump walked back this idea, saying it's "elitist" and that he's not actually considering it.

bloomberg.com/news/articles/…

But who knows with him? Who's to say he won't change his mind again tomorrow?

(10/n)
I will say what I've been saying for over two years. #NotOnePenny in tax cuts for the rich. Not again. We need a tax code that centers the people who make our country work. We need a tax code that centers US. (11/11)
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