Trump Capital Gains Plan Would Cut Buffett's Tax Bill, Not Eliminate It

Macro

โดย Yahoo Finance·

Summary · why it matters

The Trump administration is weighing a plan to index capital gains for inflation, which would reduce but not eliminate the tax bill on Warren Buffett's long-held stock positions. National Economic Council Director Kevin Hassett confirmed the White House is developing capital gains proposals ahead of November's midterms, with inflation-indexed cost basis at the center. For Berkshire Hathaway's Coca-Cola stake, built between 1988 and 1994 with a split-adjusted cost basis near $3.25 a share, cumulative inflation of roughly 2.7 times would push the adjusted basis to around $8 to $9, but with Coca-Cola trading in the high $80s, the adjustment shaves only a few dollars off the taxable gain per share. The Cruz-Scott version of indexing was estimated to reduce federal revenue by about $200 billion, while the Committee for a Responsible Federal Budget warned that executive action alone could add $170 billion to $950 billion to the national debt by 2035. Investors whose holdings merely tracked inflation would benefit most from indexing, while genuine long-term compounders still owe tax on decades of real outperformance.