Will the Trump administration change the tax on capital gains?

Capital gains tax is a special tax that is charged on gains made in trading and investing. Therefore, every trader needs to know how they are charged. Trump is known for his pro-business approach and tax cuts. These taxes are critical as they have a serious impact on investment decisions and, therefore, economic activities. In this text, we analyze whether the Trump administration is planning any changes to capital gains taxes and what these changes mean for the policy and investment landscape.   

Capital gains taxes explained – Why should you care?

Capital gains taxes are levied on profits from the sale of an asset, such as stock, bonds, or real estate. For example, taxes on FX trading are charged when a Forex trader withdraws their profits. These taxes are super important as they directly affect the profits and earnings of investors and traders. However, it is not only traders and investors who are interested in the capital gains tax. Anyone who is selling their property or a stock will also get charged, reducing their income. 

Different administrations have sometimes changed capital gains taxes. At times, governments have lowered these rates to motivate investors and enhance economic growth, while other periods have seen proposals to raise them. Some economists think it is a best idea to find a balance where these rates are optimal and do not hinder economic growth. 

Trump administration’s tax agenda for the 2nd term

Since his re-election in 2025, President Trump has continued his long-held belief that lower taxes drive economic growth. Building on the Tax Cuts and Jobs Act (TCJA) of 2017 (his 1st term), Trump’s administration is now pushing to make these cuts permanent to reduce the tax burden on both individuals and businesses. Key proposals include extending the low individual tax rates to fuel consumer spending. The current agenda also calls for reducing the corporate tax rates even further. Some of this proposal suggests cutting rates as low as 15% for companies that manufacture products in America. This should boost domestic production and attract investment. 

However, there has been no news regarding the capital gains tax cuts. While some critics and democrats have proposed taxing capital gains at ordinary income rates, such ideas have not yet found a place in Trump’s official policies. Instead, the main focus still remains on maintaining low rates across the board to boost domestic economic growth.

Overall, Trump’s second term tax agenda is built on a simple principle: lower taxes mean a more vibrant economy tomorrow. This approach, while not including capital gains tax, keeps American businesses competitive and encourages domestic investment. 

Policy proposals

There were proposals calling for higher capital gains taxes from Democrats and some policy experts as well. Their proposals were mainly focused on providing income equality by treating capital gains as ordinary income. This change could potentially yield higher tax revenues from high-income investors. However, any significant changes to existing capital gains tax would mean changing many existing laws and would require congressional approval. This legislative process for such changes is often characterized by political challenges and is not an easy task to solve. The proposal to raise these taxes faced serious challenges, and we can almost surely dismiss any chances of capital gains taxes becoming higher. 

What to Expect from Trump

While it is impossible to forecast what Trump’s stance will be on any given topic the main tendencies include tax reduction. Reducing capital gains tax would boost investment and we might see such policies implemented, although somewhat unlikely given the complexity of this specific tax. 

In practice, the TCJA did not alter capital gains tax. While the law made changes to other areas of the US tax system, capital gains rates largely remained at the same level for years. This stance reflects a deliberate choice to prioritize economic expansion over tax revenue increases. 

The bottom line

Trump’s second term has been turbulent so far, but the president has maintained his focus on lowering taxes to spur growth in addition to tariffs. His administration has pushed for permanent tax cysts for individuals and corporations alike. However, capital gains tax was left untouched. While some critics call for higher capital gains taxes to boost equality, such changes face steep political challenges.

Overall, Trump’s aim to reduce the tax burden to fuel economic growth does not include capital gains tax, and they are likely to remain at their current low levels for years to come.