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Club for Growth Leads Coalition Urging Trump to End Taxation of “Phantom Income;” Encourages Executi

By Rachael Slobodien

Washington, DC – Today, Club for Growth along with nearly 30 other conservative groups sent a letter to President Trump and Treasury Secretary Steve Mnuchin asking that they issue an executive order that would index capital gains to inflation so that taxpayers are no longer forced to pay taxes on “phantom” gains.  In the letter, the conservative organizations explain that this Executive Order can essentially serve as a pro-growth “down payment” to help ignite the broader conversation of tax reform ahead of the Big Six’s proposal.

Below is the text of the letter along with a full list of organizations who signed it.


Dear President Trump and Secretary Mnuchin,

On behalf of the following organizations representing millions of American taxpayers, we write to strongly recommend that you 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 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 $1000 in 1997 and dutifully held it for 20 years, they could now sell it for $2665.  That’s a gain of $1665.  Unfortunately, the full amount would be subject to taxation.  But $538 of that $1665 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 strongly believe that this Executive Order is a pro-growth “down payment” that will help ignite the broader conversation about tax reform.  And our groups look forward to the opportunity to continue working with the Administration to enact comprehensive tax reform this fall.


David McIntosh, President

Club for Growth

Adam Brandon, President


Michael Needham, Chief Executive Officer

Heritage Action

Phil Kerpen, President

American Commitment

Jenny Beth Martin, Co-Founder

Tea Party Patriots

Judson Phillips, President

Tea Party Nation

Larry Kudlow

Committee to Unleash Prosperity

Brian Wesbury, Chief Economist

First Trust Advisors, LP

Pete Sepp, President

National Taxpayers Union

James L. Martin, President

60 Plus Association

Lewis K. Ulher, President

National Tax Limitation Committee

Heather Higgins, President

Independent Women’s Voice

Rick Manning, President

Americans for Limited Government

Grover Norquist, President

Americans for Tax Reform

Karen Kerrigan, President & CEO

Small Business and Entrepreneurship Council

Andrew F. Quinlan, President

Center for Freedom and Prosperity

Becky Norton Dunlop

Former Advisor to President Reagan

Ryan Ellis, Senior Tax Advisor

Family Business Coalition

Dan Weber, President

Association of Mature American Citizens

Bob Carlstrom, President

The Carlstrom Group, LLC

Jeffrey Mazzella, President

Center for Individual Freedom

Tim Huelskamp, Ph.D., President

The Heartland Institute

Chrissy Harbin, Vice President of External Affairs

Americans for Prosperity

Jorge Lima, Executive Director

The Libre Initiative

Nathan Nascimento, Vice President of Policy

Freedom Partners Chamber of Commerce

David Barnes, Policy Director

Generation Opportunity

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