Club for Growth Leads Coalition Urging Trump to End Taxation of “Phantom Income;” Encourages Executive Order
Rachael Slobodien - September 26th, 2017
Washington, DC – Today, Club for Growth along with nearly 30 other conservative groups sent a letter to President Trump and Treasury Secretary Steve Mnuchin asking that they issue an executive order that would index capital gains to inflation so that taxpayers are no longer forced to pay taxes on “phantom” gains. In the letter, the conservative organizations explain that this Executive Order can essentially serve as a pro-growth “down payment” to help ignite the broader conversation of tax reform ahead of the Big Six’s proposal.
Below is the text of the letter along with a full list of organizations who signed it.
Dear President Trump and Secretary Mnuchin,
On behalf of the following organizations representing millions of American taxpayers, we write to strongly recommend that you end the tax injustice that is currently included in the computation of capital gains. Specifically, we request an Executive Order that would index capital gains to inflation so that taxpayers do not pay taxes on “phantom” gains.
For much the same reason that income tax brackets were indexed to inflation over 30 years ago, we believe that it is only a matter of fairness to do the same for capital gains.
For example, if someone saving for retirement purchased an S&P index fund for $1000 in 1997 and dutifully held it for 20 years, they could now sell it for $2665. That’s a gain of $1665. Unfortunately, the full amount would be subject to taxation. But $538 of that $1665 isn’t a real gain at all. It’s phantom income that was eaten away because of inflation. And yet, taxpayers are currently forced to pay taxes on this nonexistent income.
Signing this Executive Order would have an immediate, pro-growth effect on the American economy. The real after-tax rate of return on all equities would immediately be priced higher – thereby increasing the wealth held by the millions of working and retired Americans who own 401ks, IRAs, mutual funds, and brokerage accounts. It would further encourage people to expand their savings, and incentivize people to start doing so. By preventing the money from unjustly going to the government, it could be re-invested in the economy, allowing businesses to expand, innovate, and create more jobs.
We strongly believe that this Executive Order is a pro-growth “down payment” that will help ignite the broader conversation about tax reform. And our groups look forward to the opportunity to continue working with the Administration to enact comprehensive tax reform this fall.
David McIntosh, President
Club for Growth
Adam Brandon, President
Michael Needham, Chief Executive Officer
Phil Kerpen, President
Jenny Beth Martin, Co-Founder
Tea Party Patriots
Judson Phillips, President
Tea Party Nation
Committee to Unleash Prosperity
Brian Wesbury, Chief Economist
First Trust Advisors, LP
Pete Sepp, President
National Taxpayers Union
James L. Martin, President
60 Plus Association
Lewis K. Ulher, President
National Tax Limitation Committee
Heather Higgins, President
Independent Women’s Voice
Rick Manning, President
Americans for Limited Government
Grover Norquist, President
Americans for Tax Reform
Karen Kerrigan, President & CEO
Small Business and Entrepreneurship Council
Andrew F. Quinlan, President
Center for Freedom and Prosperity
Becky Norton Dunlop
Former Advisor to President Reagan
Ryan Ellis, Senior Tax Advisor
Family Business Coalition
Dan Weber, President
Association of Mature American Citizens
Bob Carlstrom, President
The Carlstrom Group, LLC
Jeffrey Mazzella, President
Center for Individual Freedom
Tim Huelskamp, Ph.D., President
The Heartland Institute
Chrissy Harbin, Vice President of External Affairs
Americans for Prosperity
Jorge Lima, Executive Director
The Libre Initiative
Nathan Nascimento, Vice President of Policy
Freedom Partners Chamber of Commerce
David Barnes, Policy Director