FOX Business host Larry Kudlow discusses how the cuts will ‘add growth to the GOP message’ on ‘Kudlow.’
It’s time to cut capital gains taxes. Right now. If there is a 3.0 reconciliation budget bill that only needs 50 Republican votes and Veep Vance out of 51, the GOP can do it. Put capital gains tax on that 3.0. It will add growth to the GOP message. Polls show that in addition to the voter ID bill, voters want government fraud cleaned up, and would like middle-class tax cuts to grow.
But we need some leadership from the Senate Majority Leader, John Thune, and we have to believe President Trump. He wants reconciliation money 3.0 for the SAVE America citizenship bill and military spending again, both of which are fine with me – but we need tax cuts that benefit the middle class.
Right now the empty nesters don’t need their own multi-bedroom homes, but they can’t really afford the $500,000 in capital gains tax that comes largely from President Biden’s 21 percent drop during his four years in the White House.
Last night I spoke with Newt Gingrich about this issue and here is what the former Speaker of the House said: “There are millions of Americans whose children have outgrown their homes. They would like to sell them. But the current tax effect is so great that they will not sell them.” Indexing capital gains, he added, “is very easy. Do you have to pay tax on inflation? Now, if you don’t pay tax on inflation, suddenly you have more interest in investing.” Mr. Gingrich concluded that “when we cut the capital gains tax, when I was speaker, the revenue was $60 billion from capital gains. After we cut it, it jumped to $200 billion.”
Sure, sure. Basically, no one has to pay a tax on inflation. So if we target the capital gains tax for inflation, people will just pay the tax on the real appreciation of their home or other assets, and that’s perfectly fine.
Newt Gingrich discusses how tax reforms that benefit capital gains can benefit the housing market and spur investment.
We’re not just talking about the wealthy by the way, but middle-class homeowners who probably bought their house maybe 30 or 40 years ago, and inflation is rising. Why should they be sunk just because the Federal Reserve printed too much money, or the federal government spent too much money? The answer is that it shouldn’t.
Many of us have been fighting this battle for decades. But now if we want to end the housing slump, index financing will open up millions of homes for sale on the market that will be affordable for Gen Z and millennial availability.
Here is another important point. The exemption from capital gains tax on the sale of a house is to be doubled. It is currently $250,000 for a single person, and $500,000 for married couples filing jointly.
These standards have not been changed since 1997, almost 30 years ago. There has been a lot of inflation since then. So why not increase the capital gains tax exemption to $500,000 for married couples and $1 million for married couples filing jointly? It is guaranteed that the opening effect due to the reduction of the capital gains tax will generate a net income for the federal fisc, and will significantly loosen the frozen housing market.
The current trend in home sales is about 5 million a year over time. But in recent years, it has dropped to four million a year. A decrease of a million per year. Lowering the capital gains tax will boost these sales and perhaps even new housing starts.
It would be good to get lower loan rates and easier regulations at the local level. To close the border Mr. Trump will stop all illegal immigrants driving up rent and home ownership prices. And according to a paper published by the Federal Reserve Bank of Dallas, this wave of migration accounted for nearly 30 percent of home price growth. Reducing capital gains tax can be huge. Let’s continue.
