Memo To Trump—This Is How You Can Boost The Economy In 2026

Key Concepts

• Reconciliation Bill: A legislative process in the U.S. Congress allowing for expedited consideration of certain tax and spending bills.
• Capital Gains Tax Adjustment for Inflation: Adjusting the taxable amount of profits from the sale of assets to account for inflation, preventing taxation of nominal gains.
• Portable Mortgages: Mortgages that can be transferred from one property to another, allowing homeowners to maintain their existing interest rate.
• Health Savings Accounts (HSAs): Tax-advantaged savings accounts used to pay for qualified medical expenses.
• Federal Reserve Monetary Policy: Actions undertaken by the Federal Reserve to manipulate the money supply and credit conditions to stimulate or restrain economic activity.

Economic Proposals for President Trump – A Detailed Analysis

Steve Forbes outlines a series of economic proposals intended to stimulate the U.S. economy in 2026 and bolster Republican prospects in the upcoming midterm elections. These proposals, intended for presentation to President Trump between Christmas and New Year’s by his economic advisor Kevin Hasset, center around tax cuts, housing market adjustments, healthcare reform, and a continued challenge to Federal Reserve policy.

1. Tax Cuts & Revenue Generation

Forbes advocates for a “nice cut” in both personal income tax rates and the corporate levy, achievable through another reconciliation bill. He specifically highlights the potential of adjusting capital gains taxes for inflation. Currently, individuals are taxed on the nominal gain from asset sales, even if a portion of that gain is simply due to inflation. Forbes argues that adjusting for inflation would eliminate taxation on “fake gains,” incentivizing asset sales and releasing capital for new investments. He predicts this would “generate significantly more revenue for Washington” despite being a tax cut, due to increased economic activity. He acknowledges potential legal challenges but believes the case for inflation adjustment is “substantial” and would be a strong election issue, particularly appealing to homeowners.

2. Addressing the Housing Market – Portable Mortgages

A key issue identified is the “lock-in effect” caused by the Federal Reserve’s historically low interest rate policies. Many homeowners secured mortgages at rates around 3%, and are reluctant to sell and take on a new mortgage at rates exceeding 6%. Forbes proposes implementing “portable mortgages,” common in Canada and Britain, which would allow homeowners to transfer their existing low interest rate to a new property. Despite the potential benefits, he notes the surprising opposition from the real estate lobby.

3. Healthcare Affordability – Liberalizing HSAs

Forbes identifies healthcare costs as a major affordability problem, attributing the issue to the lack of patient control over spending. Instead of patients directly controlling healthcare dollars, third parties – employers, insurance companies, and the government (Medicare/Medicaid) – do. He proposes a significant liberalization of Health Savings Accounts (HSAs) as a solution. Specifically, he suggests:

• Removing or substantially increasing restrictions on contribution limits.
• Allowing HSAs to be used without restriction for all legitimate medical services, including telehealth.
• Permitting the use of HSAs to purchase individual health insurance policies.
• Allowing individuals to establish HSAs even without a linked health insurance policy.

He further advocates for private employers to offer a diverse range of health plans, mirroring the federal government’s approach to employee health benefits, ultimately aiming to create a “private enterprise marvel of creativity and productivity” in healthcare, leading to “more and better health care at less cost.”

4. Challenging the Federal Reserve

Forbes urges a continued confrontation with the Federal Reserve, not only regarding interest rate policy but also challenging the Fed’s belief that a strong economy inevitably leads to inflation. He argues that a “reducing the value of the dollar” is the true driver of inflation, not economic growth.

5. Immigration Reform – A Pragmatic Approach

While acknowledging broad support for deporting criminals who entered the country illegally, Forbes notes growing opposition to rounding up law-abiding undocumented immigrants, particularly within the Hispanic community, leading to a decline in GOP support. He suggests a pragmatic approach: denying voting rights to illegal entrants but establishing “some arrangement for staying” due to the economic impact of their removal from sectors like construction, agriculture, hospitality, landscaping, and domestic care. He emphasizes the economic consequences of removing this workforce.

Notable Quotes:

• “No more paying tax on fake gains.” – Steve Forbes, referring to capital gains tax adjustment for inflation.
• “Only when people get control of healthcare dollars will we turn this entire arena into a private enterprise marvel of creativity and productivity.” – Steve Forbes, outlining the benefits of HSA liberalization.

Data & Statistics:

• Mention of 3% fixed-rate mortgages versus current rates exceeding 6% to illustrate the mortgage lock-in effect.
• Reference to Canada and Britain as examples of countries utilizing portable mortgages.

Logical Connections:

The proposals are logically connected by a common theme of reducing barriers to economic activity and empowering individuals. Tax cuts and capital gains adjustments aim to stimulate investment, portable mortgages address a constraint on housing market liquidity, HSA liberalization seeks to control healthcare costs, and challenging the Federal Reserve aims to maintain a stable monetary environment. The immigration discussion, while distinct, is framed as an economic necessity.

Conclusion:

Forbes presents a comprehensive set of policy recommendations designed to stimulate economic growth in 2026 and provide a political advantage for the GOP. The proposals emphasize tax cuts, deregulation, and market-based solutions, particularly in healthcare, with a consistent focus on empowering individuals and releasing capital for investment. The pragmatic approach to immigration, acknowledging economic realities, further underscores the overarching goal of boosting economic performance.