Officials inside the White House remain split over whether Trump should attempt to push it through via executive order and risk a legal challenge.
Treasury Secretary Steven Mnuchin said last year that he was studying whether the administration could sidestep Congress and issue a rule to allow capital gains to be indexed to inflation.
A Treasury Department spokesman declined to comment.
Legal Opinion
The White House hasn’t asked the Justice Department for a formal legal opinion on the matter, the people familiar with the matter said.
The Bush White House reportedly dropped its capital gains plan amid disagreement among senior officials over whether the plan was legal.
The change has been a longtime goal of Trump’s top economic adviser, Larry Kudlow, who has said the policy would spur job creation and economic growth because people wouldn’t be taxed on what he’s called “phantom income.”
“It would be a giant economic stimulus for the economy,” said Stephen Moore, a former Trump campaign adviser and a contributor to FreedomWorks, a Washington-based conservative advocacy group. “It would help the stock market and it could unleash hundreds of billions of dollars of new capital for investment.”
Moore dismissed criticism that the capital gains changes would amount to a tax cut for the wealthy, saying a majority of Americans own stock.
Those who save in Roth IRAs or 401(k) retirement accounts wouldn’t benefit from indexing because of the way the accounts are taxed, omitting many middle-class Americans from the savings the tax break generates.