Super-Rich Appointees Won’t Have To Pay Capital Gains When They Sell Assets To Avoid Conflicts Of Interest
Members of Donald Trump’s cabinet — believed to be the wealthiest group of presidential appointees in American history — likely will avoid paying hundreds of millions in taxes when they sell their assets to comply with ethics laws.Â
Trump won the election by appealing to the working class, but his cabinet has become a who’s-who of the super-rich — from Education secretary Betsy DeVos to Commerce secretary Wilbur Ross and Treasury secretary Steven Mnuchin.Â
Thanks to a little-known provision enacted in 1989, Trump’s billionaire and multimillionaire cabinet appointees won’t have to pay capital gains taxes if and when they shed their assets to avoid conflicts of interests.
Some ethics experts defend the rule, saying it avoids punishing people for serving in government by forcing them to suddenly sell, but The Washington Post reports that it’s never been tested to this degree.Â
“The stock-selling demand could come at a fruitful time,” WaPo reports. “The Dow Jones industrial average has in recent weeks hit all-time highs. But it could prove most lucrative for top officials with broad holdings in stocks and bonds. Trump’s tax plan has called for ‘across the board’ cuts, which means administration officials could preside over the same Âcapital-gains tax cuts from which they could later benefit.”Â
It’s unclear whether Trump himself can benefit from the rule, known as a “certificate of divesture.” The Office of Government Ethics is looking into whether it applies to the president, who’s exempt from many ethics rules, and Trump hasn’t committed to divesting his fortune — the size of which is unknown since he won’t release his tax returns. Â
But if Trump does choose to divest — which government accountability groups are advocating — there’s little doubt he’d be quick to take advantage of the loophole. After all, he once bragged about avoiding paying federal income taxes for two decades.Â