Trump Considers Tax-Relief Proposals to Boost Republicans Ahead of Midterm Elections
US President Donald Trump is considering a fresh set of tax-relief proposals as his approval ratings fall to some of the lowest levels of either of his presidential terms. The plans, according to Bloomberg, could give Republican candidates new promises to take to voters ahead of the November midterm elections, according to a senior economic aide and a former administration official. Among the ideas being discussed are changing the way capital gains are taxed and raising the amount of profit from a home sale that can be exempt from taxes. National Economic Council Director Kevin Hassett said in an interview with Fox that Trump is looking for new ways to give voters more reasons to support Republicans in November. One proposal is to index capital gains to inflation. Under the idea, investors would be taxed only on the part of an asset’s gain that is above inflation. This could reduce the tax bill on investments that have increased in value over many years. The other proposal would increase the tax exemption on profits from home sales. The idea being discussed would apply to homes worth $2 million or less, a major increase from the current $500,000 exemption available to married couples filing jointly, if they meet the required conditions. Kudlow, who headed the National Economic Council during Trump ‘s first term and remains close to the president, said he had spoken to Trump about both ideas. “I spoke to him, he liked the idea of indexing, he liked the idea of a bigger exemption,” Kudlow told Bloomberg. He also said that “the boss is very interested” in the proposals. Hassett said Trump wants to put more policy promises before voters in the months leading up to the election. “He wants to hit people with the things that are promises that we’re going to do if the Republicans have power in the future,” Hassett said. “So you can expect a lot more policy between now and the midterms, as we’ve been talking about, and I’m sure that’s why he was talking to you, Larry, about your great ideas on capital gains.” The White House, however, has not committed to either proposal. White House spokesman Kush Desai said Trump is “always exploring new ideas to Make America Wealthy Again,” but added that any policy announcements would come directly from the administration. Neither proposal is likely to become law quickly. Most major changes to the tax code need approval from Congress. That makes it difficult for either measure to become law before voters go to the polls in November. The idea of indexing capital gains to inflation is also not new. Previous administrations, including Trump’s during his first term, looked at whether the change could be made without Congress. But legal experts have warned that trying to make the change through executive action would likely lead to court challenges because of existing interpretations of how capital gains are treated under tax law. There is also no complete agreement among Republicans in Congress over indexing capital gains. The proposal has been discussed by Republicans, but it does not have universal support. The idea of increasing the home-sale exemption has received support from both Republicans and Democrats. Both proposals could also become a political problem for Republicans. Capital gains are largely linked to investments, while bigger home-sale profits are more common among wealthier homeowners. As a result, critics argue that the biggest benefits from the proposals would go to high-income Americans. Democrats could use that argument against Republicans during the election campaign if the plans gain momentum. The proposals come at a difficult time for Trump politically. His approval ratings have been falling through much of 2026 and are now among the weakest of his political career. A Pew Research Centre survey conducted in early July put Trump’s approval at 34%. The survey also found a 78-point difference between how Republicans and Democrats viewed his performance. Importantly, Trump’s support has also weakened among Republicans themselves. Republican approval of his performance fell from 84% shortly after he took office in early 2025 to 69% by the middle of 2026. Democratic approval, which was already in single digits, has changed little. Other polling trackers show a similar picture. Nate Silver’s Silver Bulletin, which now includes presidential approval in its 2026 midterm forecasting model, put Trump’s net approval at -20.4 as of August 11. Another polling tracker showed Trump’s approval at 38.2%, while 58.8% disapproved of his performance in early August. His numbers among independent voters were even more worrying for Republicans. Approval among independents had fallen to 34%, below the 36% level that came before the Democratic wave in the 2018 midterm elections, when Democrats gained 41 House seats. The war in Iran has added another problem for the administration. The Trump administration has at times declared the conflict over, even when war has continued. That pattern has added to public frustration and affected Trump’s approval in some state-level polling. Economic concerns are also weighing on voters. Tariff-related price increases have added to worries about the cost of living. Midterm elections are traditionally difficult for the party that controls the White House. This year, Republicans face another challenge because of Trump’s falling support among independent voters. Independent voters are often seen as an important early sign of whether an election could turn into a wider “wave” against the president’s party. Several Senate races could be especially important for Republicans. States such as Arizona, Georgia and Nevada have competitive races where Trump’s popularity could have a direct impact on Republican candidates. If his approval falls further, it could make it harder for the GOP to hold on to control of the Senate.
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