Capital Gains Tax

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    Trump Softens on Raising Taxes on the Rich, Saying G.O.P. Probably Shouldn’t

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    Days after he privately encouraged Speaker Mike Johnson to increase tax for the wealthy in a bill to fulfill his agenda, he publicly said it could be a bad idea, one that was ‘OK’ with him.President Trump on Friday publicly softened his private push on House Republicans to raise taxes on wealthy people and scrap a tax break that benefits private equity executives as part of a megabill to carry out his agenda.“The problem with even a ‘TINY’ tax increase for the RICH, which I and all others would graciously accept in order to help the lower and middle income workers, is that the Radical Left Democrat Lunatics would go around screaming, ‘Read my lips,’ the fabled Quote by George Bush the Elder that is said to have cost him the Election,” Mr. Trump wrote on his social media website, Truth Social. “Republicans should probably not do it, but I’m OK if they do!!!”Mr. Trump on Wednesday had privately urged Speaker Mike Johnson to create a higher tax bracket for those making more than $2.5 million a year. He also said he supported closing what is known as the carried interest loophole, which allows hedge fund, private equity and venture capital executives to pay taxes of only about 20 percent on their profits, which is about half the top income tax rate.The request further complicated Republicans’ job as they toil to put together a domestic policy bill they hope to push through Congress this year. Divisions within the party over potential cuts to Medicaid and other popular social programs to pay for it, and which tax reductions to include, have delayed the drafting of the package and threaten to sap support for it. And Mr. Trump’s abrupt and sometimes fleeting demands for the bill have hung over the talks, with G.O.P. lawmakers reluctant to cross him but uncertain of where he will ultimately stand.Mr. Trump is not constitutionally eligible to run for another election, unlike President George H.W. Bush, who was famously accused of breaking his campaign pledge not to impose new taxes.But Republicans are already facing blowback over Mr. Trump’s first four months in office, well ahead of the midterm congressional elections. And many do not want to take a vote that would be used by Democrats as a weapon against them.Mr. Trump did not entirely walk away from his tax demand in the social media post. But he left himself an out should Republicans balk. More

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      Prominent Cryptocurrency Investor Faces Senate Tax Inquiry

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      The Finance Committee’s top Democrat sent a letter last month to Dan Morehead, the founder of Pantera Capital, about the investigation.A Senate committee is investigating whether a prominent cryptocurrency investor violated federal tax law to save hundreds of millions of dollars after he moved to Puerto Rico, a popular offshore tax haven, according to a letter reviewed by The New York Times.Senator Ron Wyden, an Oregon Democrat, sent the letter on Jan. 9 to Dan Morehead, the founder of Pantera Capital, one the largest crypto investment firms.The letter said the Senate Finance Committee was investigating tax compliance by wealthy Americans who had moved to Puerto Rico to take advantage of a special tax break for the island’s residents that can reduce tax bills to zero.The investigation was focused on people who had improperly applied the tax break to avoid paying taxes on income that was earned outside Puerto Rico, according to the letter.“In most cases, the majority of the gain is actually U.S. source income, reportable on U.S. tax returns, and subject to U.S. tax,” the letter said.The letter requested detailed information from Mr. Morehead about $850 million in investment profits he made after moving to Puerto Rico in 2020, noting that he “may have treated” the gains as exempt from U.S. taxes.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      UK Budget: Labour Party to Raise Capital Gains and Inheritance Taxes

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      Rachel Reeves, the new finance minister, announced substantial tax increases in her first budget as she sought to strengthen public finances and services.The new British government, led by the Labour Party, said it would substantially raise taxes and borrow more for investment as it sought to steer the country out of a long run of economic stagnation.Rachel Reeves, the chancellor of the Exchequer, delivered her first budget — and the first one ever by a woman — in Parliament on Wednesday. In a nearly 80-minute speech, Ms. Reeves announced about 40 billion pounds ($51.8 billion) in tax increases, more than half of which would come from higher taxes that employers pay on their workers’ salaries. She also increased capital gains and inheritance taxes.“The choices that I have made today are the right choices for our country,” Ms. Reeves said. “That doesn’t mean these choices are easy.”The budget was the first big opportunity for the Labour Party to set Britain’s economic agenda after it was swept into office with a large majority in July’s general election after 14 years out of power.But after a turbulent few months in office for the Labour Party, the budget has been seen as a reset moment for the party itself. Keir Starmer, the prime minister, said this week that the budget would “light the way” toward the government’s priorities of ensuring financial stability, improving public services and encouraging investment.For months, Ms. Reeves has warned that this budget would include “difficult” choices, signaling that Britons will have to swallow pain now for a bigger payoff later. These choices, government officials have said, will help the government achieve its goal of making Britain the fastest-growing economy in the Group of 7.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      I.R.S. Failed to Police Puerto Rico Tax Break, Whistle-Blower Says

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      An insider accused the agency of failing to scrutinize a lucrative tax break in Puerto Rico designed to lure wealthy Americans to the island.For the past decade, thousands of wealthy Americans have been flocking to Puerto Rico to take advantage of a tax break that can cut their tax bills to zero. For nearly as long, there have been allegations that the benefit enables multimillionaires to avoid paying what they owe when they reap big investment profits.Now, an Internal Revenue Service insider has accused the agency of failing to police the tax break. Despite a high-profile campaign announced more than three years ago to unearth possible abuse, the agency has audited barely two dozen people and has collected back taxes from none, according to a letter that an agency insider wrote this year to lawmakers and that has been reviewed by The New York Times, as well as interviews with I.R.S. officials.Senate officials have begun an investigation into the whistle-blower’s allegations about the Puerto Rican tax benefit.“It’s been three years since the I.R.S. announced its enforcement campaign on this issue,” said Senator Ron Wyden, Democrat of Oregon and chairman of the Senate Finance Committee. “It needs to pick up the pace.”Hamstrung by decades of budget cuts, the I.R.S. has regularly struggled to crack down on tax avoidance by the wealthiest Americans and large companies. Audits of millionaires have declined more than 80 percent over the past decade, reaching record lows. The agency rarely examines giant private equity firms. And the annual “tax gap” — the difference between taxes that are owed and what is paid — is estimated to be $600 billion.In an interview, Danny Werfel, the I.R.S. commissioner, said the agency’s enforcement campaign in Puerto Rico, while still in its “early chapters,” was accelerating because of the $80 billion in new funding that the 2022 Inflation Reduction Act provided to the agency.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More