White House Mulls Tax Incentive To Encourage More Americans To Buy Stocks
The Trump administration is eyeing another round of tax cuts as President Donald Trump seeks reelection this fall, with a particular focus on the middle class and a desire to incentivize investing in the stock market.
One proposal under consideration, according to CNBC, would make a “portion of household income treated as tax-free for the purposes of investing outside a traditional 401(k).”
Multiple officials described a hypothetical scenario in which a “household earning up to $200,000 could invest $10,000 of that income on a tax-free basis, although officials noted these numbers are fluid.”
National Economic Council Director Larry Kudlow told the news outlet that one concept in particular has been examined most closely, and it involves “creating universal savings accounts, which would combine retirement, education and health care savings into one vehicle.”
Kudlow said that money put into the account would be after-tax, and then taxes would be applied when money is withdrawn; however, any money accumulated in the account during the investment period — otherwise known as capital gains — would be tax-free.
No decisions have been made as to the final tax package contents, but both Kudlow and Vice President Mike Pence have indicated the package could be revealed in the fall — just in time for Americans to head to the voting booths.
The tax cuts are “one of the reasons why we’re going to focus so much energy on making sure that not only do we get President Donald Trump four more years in this White House, but we’re going to make sure that we reelect a Republican Senate and elect a Republican House of Representatives,” Pence said during a recent appearance on Fox Business News.
“It’s sort of an idealistic document,” a senior official who is part of the discussions told CNBC. “Sort of, ‘If you reelect this administration, this is what you’re going to get.’”