Larry Kudlow Working With Unnamed Senator to Sink Hidden Tax Hike Larry Kudlow Working With Unnamed Senator to Sink Hidden Tax Hike – NTK Network

Larry Kudlow Working With Unnamed Senator to Sink Hidden Tax Hike

CNBC's Larry Kudlow said he believes a senator will scrub the first-in, first-out tax in the reform bill.

By NTK Staff | 12.12.2017 @4:39pm

Economic analyst Larry Kudlow said on CNBC Tuesday that he is in communication with an unnamed Senator who he believes will scrub the controversial first in, first out tax in the tax reform bill.

“I know the senator who put this deal together,” Kudlow said on CNBC’s “Power Lunch.” “I’m not going to mention his name, but I think he is going to finish off by getting rid of this provision.”

The first in, first out (FIFO) provision would prevent investors from deciding which shares they can sell and require them to sell the first shares they purchased. This will hurt investors, particularly small investors who purchased stocks years ago that have since increased in value. They will be forced to pay a much higher tax bill since they will have technically made more gains under the new system.

“It’s a backdoor capital gains tax hike on individuals, and what makes this even more bizarre is that mutual funds which have a very well-heeled lobbying firm down here, got a carve out,” said Kudlow. “So it is the individuals who are going to be screwed, not the mutual funds.”

“It should be equal in my opinion, and by the way, it is a dumb idea,” he added. “I don’t want to raise the capital gains tax. I want to lower the capital gains tax.”

Kudlow said he is in favor of the tax reform bill, but wants FIFO removed, saying the revenue raised would be “infinitesimal.”

“They’re going to lose revenues on this, not raise revenues,” he added. “That’s the history of capital gains.”

Bob Cusack, editor-in-chief of The Hill, agreed the tax would likely be scrapped in negotiations between the House and Senate.

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