Trump administration considers tax incentive for more Americans to buy stocks, report says




 

The Trump administration is considering ways to motivate American households to invest in the stock market, according to a CNBC report. The move would be part of an upcoming package of proposed tax cuts.

The proposal would allow a portion of household income to be treated as tax-free for the purposes of investing outside of a traditional 401(k), CNBC reported citing four unnamed "senior administration officials familiar with the discussions." Under one potential scenario, a U.S. household earning up to $200,000 could invest $10,000 on a tax-free basis, although the numbers were fluid, CNBC says.

The development comes as President Donald Trump seeks reelection in November. He has signaled a willingness recently to scale back Social Security and Medicare.

"The Trump administration is trying to pave the way for adjusting Social Security by giving people incentives to invest privately," says Peter Cardillo, chief market economist at Spartan Capital Securities. "I don't think a recipient of Social Security today would have anything to worry about, but future generations would."

The White House didn't immediately respond to requests for comment.

Social Security: Here's what Trump's proposed budget could mean for your benefits

A tale of two markets: Why are stocks and bonds diverging as coronavirus spreads?

"It's a good idea to incentivize people to contribute to their savings to build up a nest egg, but I don't think this will move the needle," says Thomas Martin, senior portfolio manager at Atlanta-based GLOBALT Investments. "It's hard to imagine that it would be that stimulative to the stock market if it's geared toward Americans that already own stocks." Just 55% of Americans own stock, according to a recent Gallup poll.

.

"It certainly benefits the upper portion of the income population more than the lower half. Anyone with a high salary is likely investing anyway," says Yung-Yu Ma, chief investment strategist and managing director at BMO Wealth Management.

Last month, Trump hinted in an interview with CNBC that he would be willing to consider cuts to social safety-net programs like Medicare to reduce the federal deficit if he wins a second term.

His proposed budget, unveiled Monday, targets those programs and includes cuts to the Social Security program. The budget also includes cuts to student loan forgiveness programs.

Trump budget: Is his proposed 1% raise and benefit cuts for federal employees fair?

Student loans: Trump budget would ax some student loan forgiveness programs

To be sure, a new tax incentive to buy stocks could benefit some Americans since it could unleash extra spending from higher income individuals, Ma says.

Still, there are questions over how that program would be funded. It could also face challenges to get passed in a Democratic majority led House.

"This could just be political rhetoric in an election year," Cardillo says. "The chances of it actually happening are slim."

Courtney Subramanian contributed.

This article originally appeared on USA TODAY: Trump administration considering plan to increase investing in stocks

COMMENTS

More Related News

Trump pushed CIA to find, kill Osama bin Laden
Trump pushed CIA to find, kill Osama bin Laden's son over higher priority targets

When the CIA gave Trump a list of major terror leaders to kill, he said he'd never heard of them but Instead focused on a target with a famous name, sources said.

Pelosi says she
Pelosi says she 'had no intention' to tear up Trump's State of the Union until she read it

Once she read through more of the speech, the speaker said she "realized that almost every page had something in it that was objectionable."

With tickets costing $580,600 per couple, Trump
With tickets costing $580,600 per couple, Trump's Saturday fundraiser will be his most expensive yet

If you want to attend President Trump's Saturday night fundraiser in Palm Beach, you'd better sell that old Renoir on the wall, quickly marry an oligarch, sell a kidney to a despot who really needs it, or ask Mike Bloomberg for a loan.The $580,600-per-couple event will be held at the beachfront

Michael Avenatti is convicted of trying to extort Nike
Michael Avenatti is convicted of trying to extort Nike

Michael Avenatti, the lawyer who gained fame by representing a porn star in lawsuits involving President Trump, was convicted of trying to extort sportswear giant Nike.

US won
US won't charge ex-FBI official McCabe, a Trump target
  • World
  • 2020-02-14 17:21:48Z

Federal prosecutors have declined to charge former FBI Deputy Director Andrew McCabe, closing an investigation into whether the longtime target of President Donald Trump's ire had lied to federal officials about his involvement in a news media disclosure, McCabe's legal team said Friday. The decision, coming at the end of a tumultuous week between the Justice Department and the White House, is likely to further agitate a president who has loudly complained that federal prosecutors have pursued cases against his allies but not against his perceived political enemies. The action resolves a criminal investigation that began nearly two years ago with a referral from the Justice Department's...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy