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GOP tax writer introduces bill to reduce capital gains taxes

GOP tax writer introduces bill to reduce capital gains taxes
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Rep. Devin NunesDevin Gerald NunesJuan Williams: Trump, the Great Destroyer The Hill's 12:30 Report — Presented by Citi — Latest on Hurricane Michael | Trump, Kanye West to have lunch at White House | GOP divided over potential 2020 high court vacancy Senate Dem: Trump's 'fake, hyperbolic rantings' an insult to real Medal of Honor recipients MORE (R-Calif.) this week introduced legislation that would reduce the amount people pay in capital gains taxes, as conservatives press the Treasury Department to take action on the topic.

The bill from Nunes, a senior member of the tax-writing House Ways and Means Committee, would index capital gains to inflation. He argues that the measure would build off the tax-cut law President TrumpDonald John TrumpCorker: US must determine responsibility in Saudi journalist's death Five takeaways from testy Heller-Rosen debate in Nevada Dem senator calls for US action after 'preposterous' Saudi explanation MORE signed last year and incentivize investment.

“This bill will continue the tax-cutting trend that began with the tax relief bill last year,” Nunes said in a statement Friday. “This is a common-sense reform that will remove an unjust tax, contribute to economic growth, and help both large and small investors keep more of their own money.”

Under current law, taxpayers pay capital gains taxes on the difference between what they pay for an investment and what they sell it for. Nunes and other Republicans want that formula changed to the difference between what they paid for an investment, plus inflation, and the amount for which the investment was sold.

Sen. Ted CruzRafael (Ted) Edward CruzElection Countdown: Small-donor donations explode | Russian woman charged with midterm interference | Takeaways from North Dakota Senate debate | O'Rourke gives 'definitive no' to 2020 run | Dems hope Latino voters turn Arizona blue White vote is 'fundamental problem' for Texas Dems, political analysts says Houston Chronicle endorses Beto O'Rourke in Texas Senate race MORE (R-Texas) has also introduced legislation that would index capital gains to inflation. And GOP lawmakers are considering including a provision to index capital gains as part of a "phase two" of tax cuts that the House is planning to vote on in September.

However, the Senate is unlikely to pass a second round of tax cuts since doing so would require the support of some Democrats. A group of Democratic members on the Senate Finance Committee have expressed opposition to indexing capital gains, saying it would increase the deficit and largely benefit the wealthy.

Prominent conservatives like Americans for Tax Reform President Grover Norquist have been urging Treasury Secretary Steven MnuchinSteven Terner MnuchinOn The Money: Mnuchin to attend anti-terror meeting in Saudi Arabia | Treasury releases guidance on 'opportunity zone' program | Maxine Waters gets company in new GOP line of attack Mnuchin to attend anti-terror meeting in Saudi Arabia following Khashoggi disappearance Treasury releases guidance on 'opportunity zone' program created by Trump tax law MORE to issue regulations to index capital gains. They argue that the department has the authority to do so as a result of a 2002 Supreme Court ruling. Democrats say the Treasury Department cannot take that kind of executive action regarding capital gains.

Mnuchin told the Wall Street Journal last month that he thinks Congress should take the lead on indexing capital gains.

“Consider that with, obviously, other parts of Tax 2.0,” he said. “If we’re not able to complete Tax 2.0, then we’ll go back to the drawing board and decide whether we want to consider this on a nonlegislative basis."