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January 29, 2018

Dear President Trump and Secretary Mnuchin,

On behalf of the following organizations representing millions of American taxpayers, we congratulate your strong leadership in helping pass the Tax Cuts and Jobs Act of 2017.  It’s extremely pro-growth, delivers real tax cuts to working families, and signals to the private sector that Washington is not interested in smothering the economy through bigger government.

To follow up on that success, we write to strongly recommend that you use your executive power as president to 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 regular 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 $1,000 in 2008 and dutifully held it for ten years, they could now sell it for $1934.  That’s a gain of $934.  Unfortunately, the full amount would be subject to taxation.  But $168 of that $934 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 endorsed this Executive Order in 2017, but we suspended our efforts so that it did not confuse the tax reform debate.  Now that tax cuts has been successfully passed into law, we believe now is the right time to continue your successful leadership in bringing about real economic growth through additional tax cuts.  This executive order would do just that.

Sincerely,

 

David McIntosh

President

Club for Growth

 

Grover Norquist

President

Americans for Tax Reform

 

Dan Holler

Vice President

Heritage Action

 

Jason Pye

Vice President of Legislative Affairs

FreedomWorks

 

Phil Kerpen

President

American Commitment

 

Heather R. Higgins

President and CEO

Independent Women's Voice

 

Carrie Lukas

President

Independent Women's Forum

 

Olivia Grady

Senior Fellow

Center for Worker Freedom

 

James Martin

Founder/Chairman

60 Plus Association

 

Palmer Schoening

Chairman

Family Business Coalition

 

Karen Kerrigan

President & CEO

Small Business & Entrepreneurship Council

 

Sal J. Nuzzo

Vice President of Policy

The James Madison Institute

 

Brian Garst

Vice President

Center for Freedom and Prosperity

 

Jeffrey Mazzella

President

Center for Individual Freedom

 

Rick Manning

President

Americans for Limited Government

 

Pete Sepp

President

National Taxpayers Union

 

Larry Kudlow

Committee to Unleash Prosperity

 

David Williams

President

Taxpayers Protection Alliance

 

Chrissy Harbin

Vice President of External Affairs

Americans for Prosperity

 

Nathan Nascimento

Executive Vice President

Freedom Partners Chamber of Commerce

 

Daniel Garza

President

The LIBRE Initiative

 

David Barnes
Policy Director

Generation Opportunity

 

Daniel Schneider

Executive Director

The American Conservative Union

 

Amy Kremer

Co-Founder & Co-Chair

Women for Trump

 

Norm Singleton

President

Campaign for Liberty