× Expand Olivier Douliery/Abaca Press/Sipa via AP Images President Donald Trump celebrates the Tax Cuts and Jobs Act with Republican members of the House and Senate, December 20, 2017.

On domestic policy matters, Donald Trump campaigned, like “compassionate conservative” George W. Bush before him, as a different kind of Republican. He vowed to spend money to fix U.S. infrastructure, protect Social Security and Medicare, and ditch business conservative orthodoxy on free trade.

Also like George W. Bush, Trump has governed like a bog-standard conservative, with only tax cuts and deregulation to show for his first few years. Only one major piece of legislation is likely to get Trump's signature in his entire first term: the 2017 Tax Cuts and Jobs Act.

The effects of those cuts were predictable. According to a report by the Institute on Taxation and Economic Policy, two-thirds of those cuts have gone to the top 20 percent of earners. The richest 1 percent are currently reaping more benefits than the bottom 60 percent of Americans. By 2025, those tax cuts will balloon to $10.6 trillion, with some $2 trillion flowing to the wealthiest 1 percent of Americans. The San Francisco Fed and others have published studies showing that there’s no indication that any of this will grow the economy at all.

Massive tax giveaways to the rich are a time-honored Republican tradition. Combined, the Bush and Trump administrations have teamed up to produce two decades of massive tax breaks for the rich. From 2001 through 2018, changes to the federal tax code have reduced revenue by $5.1 trillion. Sixty-five percent of the savings has gone to the richest fifth of Americans, with 22 percent of it going exclusively to the top 1 percent.

Where the Trump administration is innovating on tax cuts—really out of necessity, since there are few cuts left to make—is in the arena of capital gains taxes, which has quickly become one of its signature economic accomplishments. Sure, Bush-era Republicans lowered capital gains rates. But in the Trump years, the right has devised new ways to make tax revenue from investment income vanish.

This makes sense in an era of extreme inequality, when the top 0.1 percent make so much money just from having money, and parking it in stocks, interest-bearing bonds, and real estate. In a society with runaway capital, the right needs to stifle taxes on capital gains. While the Tax Cuts and Jobs Act was stuffed to the gills with familiar provisions—cuts for top earners, a massive reduction of the estate tax, with the tax-free estate limit doubled to some $11 million—it also included a new program called “opportunity zones,” where investors were encouraged to pour money into low-income areas.

It allows people to sell stocks or other investments and skirt capital gains taxes on those transactions for years, so long as they park the proceeds in investments in any of the nearly 9,000 federally certified zones scattered around the country. Any subsequent profits from those projects dodge federal taxation altogether. The program was sold as a great boon for low-income areas with markedly higher rates of unemployment or poverty.

An investigation in The New York Times last week provided the first sweeping review of the provision, which was (rather incredibly) conceived of by Sean Parker, founder of Napster and early investor in Facebook. Perhaps predictably, billions in untaxed investment profits have been diverted into everything from luxury hotels to college towns to storage facilities, many of which have been dubiously classified as low-income areas and have created exceedingly few jobs.

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The provision allows investors to defer capital gains taxes on that original money for up to seven years. So large untaxed sums are free to generate further large, totally tax-free winnings before any comparatively scant tax bill ever comes due. And after ten years, the investor can sell their stake in the investment without owing any taxes on the profits. According to one estimate, that compound incentive structure could increase an investor's return by a startling 70 percent.

Paul Krugman has since called opportunity zones a “fiasco.” But the program’s impact—effectively allowing investors to circumvent capital gains tax by laundering that money through luxury high-rises—fits comfortably with the GOP’s new signature campaign to erode the capital gains tax.

Despite opportunity zones blanketing the country, even that isn't enough. Just a few days before the Times investigation, former Republican operative and anti-tax maven Grover Norquist was in The Washington Post, clamoring for a new provision that would index capital gains to inflation. That proposal would amount to another massive tax rollback of capital gains tax as it’s currently structured. Norquist points to an example of selling a stock purchased in 1970—indexing would drop the tax bill by 70 percent.

Norquist references Trump's recent comments about such a possibility as a sign it's being seriously considered. “Many people like indexing, and it can be done very simply. It can be done directly by me,” Trump said in August. A day later, he doubled down, saying, “If I wanted to do it, I believe I could,” without approval of Congress.

It's not the only time the Trump administration has voiced enthusiasm for such a policy: Bloomberg reported on serious discussions about it in July. While Norquist claims that 24 million American households would benefit from this generous suggestion, the data indicate it would be an extremely top-heavy windfall, even by today’s standards. As Kalena Thomhave wrote in the Prospect in July, “the Penn Wharton Budget Model, a research organization at the University of Pennsylvania, published findings that the majority—63.1 percent—of the benefits from this move would go not just to the top 1 percent, but the top 0.1 percent. Just 2.5 percent would be felt by those Americans in the bottom 90 percent of wealth.”

There is already a massive discrepancy between the rates at which capital gains and income are taxed: The top income tax bracket in the United States stands at 37 percent, while the capital gains tax tops out at 20 percent. The implications of this can be huge. As the economist Thomas Piketty has noted, the primary engine of inequality has been the return on capital outpacing that of economic growth, which is then exacerbated by upside-down rates of taxation. It's a major reason that the 2017 Allianz Global Wealth Report pegs the U.S. Gini coefficient, a measure of inequality, at .81. (A society where one household held all of the wealth would get a 1.0; one with total wealth equality would get a 0.0.) Other estimates have seen the U.S. Gini pegged as high as .85, considered the highest wealth inequality for any developed country worldwide.

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The war on capital gains tax has fast become the primary economic front for Trump and the GOP, even as all claims to the legitimacy of trickle-down have been roundly debunked. If Trump is ultimately thwarted on his wall and everything else, it would not be a surprise to see him use his executive authority to continue to chip away at it.

It's something Democrats would be wise to take note of. The question of how to tax returns on capital, could, like a wealth tax, be an effective and popular way to reel in inequality in a fairly targeted way. Even taxing capital gains as regular income could be an easy start, as could ending the absurdity of wiping out all capital gains earned over a lifetime upon death. Questions remain about Trump’s ability to single-handedly implement such a program: The George H.W. Bush administration abandoned its own attempt to index capital gains to inflation after concluding that the president didn’t have that authority. But reversing the current administration’s erosion of the capital gains tax will have to be an immediate priority for a subsequent administration hoping to make inroads on runaway inequality.