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Letter encouraging adjusting the calculation of capital gains to account for inflation

From Juanita Duggan

The Honorable Steven Mnuchin Secretary Department of the Treasury 1500 Pennsylvania Avenue, N.W. Washington, D.C. 20220

Dear Secretary Mnuchin:

Thank you for attending NFIB’s 75th anniversary with President Trump. I am pleased you were able to see NFIB members’ enthusiasm for the Tax Cuts and Jobs Act firsthand.

Building on the successes of the Tax Cuts and Jobs Act, I urge you to consider opportunities through which the Treasury Department can continue to support small businesses and bolster our thriving economy.

Specifically, I encourage you to adjust the calculation of capital gains to account for inflation.

Because Congress must contend with numerous institutional rules under the reconciliation process, significant tax policy options were limited or not incorporated into the Tax Cuts and Jobs Act. For instance, several provisions important to small business, including Section 199A, sunset at the end of 2025.

While expiring provisions require Congressional action, the Treasury Department has the authority to correct the calculation of capital gains. Various precedents, including Verizon v. FCC (2002) and National Cable & Telecommunications Association v. Brand X Internet Services (2005), provide the legal authority for Treasury Department action.

Beyond advancing sound policy, this correction would create jobs and boost the economy. Last year, former Treasury Department economist Gary Robbins estimated that indexing capital gains for inflation would, by 2025, create an additional 400,000 jobs, grow the U.S. capital stock by $1.1 trillion, and boost GDP by roughly $500 billion. These projections promise good news to small business owners across the country.

Thank you for your consideration. I look forward to continuing our dialogue on how the Treasury Department can best support small businesses.


Juanita D. Duggan, President & CEO – NFIB

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