Arguments for and against two Republican senators calling for a Treasury Department-led $200 billion tax cut found the average American stuck on the outside looking in.
Whether talking about affordability or the focus group-hallmarked “abundance agenda” promoted by California Gov. Gavin Newsom (D), the economy remains a key focus in the wake of Bidenflation. With that in mind, Republican Sens. Ted Cruz of Texas and Tim Scott of South Carolina urged Treasury Secretary Scott Bessent to cut capital gains taxes on investors in what critics view as an “illegal” boon to the “ultra-rich.”
“This inflation tax unfairly penalizes savers and locks up capital that would otherwise flow back into the economy through new investment and higher wages, which slows economic growth,” argued the senators in the letter first reported by the Washington Post.
“Many Americans are choosing not to sell their homes to avoid substantial capital gains taxes, creating a lock-in effect that discourages downsizing even when their homes no longer meet their current needs,” the lawmakers contended. “Adjusting the capital gains cost basis for inflation incentivizes those who have held property for decades to downsize and list their single-family homes for sale–increasing the supply of family housing.”
Among those decrying the request, American Enterprise Institute senior fellow Kyle Pomerleau dubbed the move “illegal” and argued it “Won’t have much of an impact on the economy one way or another,” while Harvard professor and Obama era Council of Economic Advisers chair Jason Furman added, “Not good tax policy if you don’t adjust other parts of the system for inflation, most importantly reducing people’s interest deduction to only real interest–no longer allowing deductions for the inflation component of interest.”
I would add:
3. Not good tax policy if you don’t adjust other parts of the system for inflation, most importantly reducing people’s interest deduction to only real interest–no longer allowing deductions for the inflation component of interest. https://t.co/8N6Pd5D5x7
— Jason Furman (@jasonfurman) March 3, 2026
Likewise, Oregon Sen. Ron Wyden (R) reacted, “Ted Cruz is asking the Treasury Department to break the law to give another round of tax breaks to the ultra-rich. These guys can’t help themselves.”
In response, Americans for Tax Reform President Grover Norquist shared a clip of then-New York Rep. Chuck Schumer, who once argued in favor of indexing all capital gains as a means to increase growth.
Hi Ron,@tedcruz and then congressman Chuck Schumer (below) both understand that indexing capital gains would benefit 30 million Americans each year. pic.twitter.com/0qpIDxYQS5
— Grover Norquist (@GroverNorquist) March 3, 2026
Norquist also argued, “Ending the inflation tax on cap gains is the GOP’s silver bullet to Biden’s inflation for the midterms. Our NRSC Chairman @SenatorTimScott and @tedcruz understand we need to force Democrats to argue that each year 30 million Americans must pay takes on inflationary (fake) gains.”
Meanwhile, as the GOP-controlled Congress has yet to demonstrate any meaningful steps to codify the efforts of the Department of Government Efficiency, support the president’s tariff initiative, or act toward reducing spending and achieving a balanced budget, reactions on social media couldn’t help but wonder where the cuts were for the average American beyond no tax on tips, overtime and Social Security.
Yes, let’s let the rich make more money than the average American yet again
— AnEnemyWithin (@An_Enemy_Within) March 3, 2026
lol of course it’s never a tax cut for working class Americans
— Jumofo (@JuMofool) March 3, 2026
Perhaps a third of US households own stocks outside of retirement accounts (this proposal would not affect 401k or IRA accounts).
Wanna guess which third?
Wanna guess which segment of that group gets almost all the benefit?
— Paul Meloan (@PaulMeloan) March 3, 2026
Okay. Where are the Spending CUTS?
— Craig Campbell (@soup12171958) March 3, 2026
Native of Brooklyn, NY, Kevin Haggerty is a graduate of Hunter College where he studied Cultural Anthropology and Geography. An avid reader and truth seeker, he currently resides in Texas with his wife and their dog and, when he isn't researching current events and their impacts, you'll find him spending time with friends and family or working on his next novel.
Comment
We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the ∨ icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.