Name:	MartiniMan -	Reply
Subject:	The need to index capital gains to inflation
Date:	8/14/2017 3:36:07 PM (updated 8/14/2017 3:40:27 PM)

One of the more perverse aspects of capital gains taxes is that they don't take into account inflation as a factor in the gains recognized. As an example, if you invested $1,000 and it grew to $1,200 simply because of inflation you would still pay capital gains taxes on the $200 even though the actual gain was zero.  In many cases, when you factor in inflation of assets held over a long period of time there was essentially zero gain.  Despite that you will still have to pay taxes on the inflated value of that asset.  You may in fact get less money out of an investment after taxes than you actually put in.  This really harms capital growth and hampers our economy.  "Former Treasury economist Gary Robbins estimates that indexing capital gains for inflation this year would, by 2025, create an additional 400,000 jobs, grow the U.S. capital stock by $1.1 trillion, and boost GDP by roughly $500 billion. That all translates to an additional $3,600 for the average household."  And the best part about this is Trump could do this without legislation by using the executive order.  Then when and if we get around to tax reform they can make it permanent.  

And lest the class warriors want to weigh in with the typical envy crap, this helps everyone with a 401k or IRA.  And in fact it helps the little guy the most because inflation has a huge negative impact on those long-term retirement savings accounts.  This is a win for the little guy who will have to rely on their 401k/IRA since about all social security will do is cover the cost of eating dog food.

Name:	GC -	Reply
Subject:	The need to index capital gains to inflation
Date:	8/14/2017 4:57:45 PM

Wow you're in trouble now via the greed police!

Name:	Moldyoldy -	Reply
Subject:	The need to index capital gains to inflation
Date:	8/14/2017 4:59:35 PM

You are right, marti. And it's most damaging to the long term investors, because inflation hurts them the worst. Government and society condemn the short term, quick buck investors, but then they set up a system that favors the quick buck artist and penalizes the stable, conservative investlrs.

Name:	GoneFishin -	Reply
Subject:	The need to index capital gains to inflation
Date:	8/14/2017 5:35:26 PM

The concept has been around for years. It was vetoed by Carter. India implemented it in 2016. Maybe, we will see it happen.

Would require some effort to index a stock with reinvested dividends.

It would be great if it applies to income property and 2nd homes that were purchased many years ago and subject to capital gains.

One question, where did you read that it would apply to IRA and 401k? I can't see how to index when you have a 401K or IRA for many years trying to determine when you make a withdrawal many years later how the withdrawl is effected by inflation for each stock you purchased with reinvested dividends and stocks you mave have sold over the years since taxes are deferred until withdrawal? I would really enjoy reading how it would work for my self directed IRA as it would really help since withdrawals are taxed at regular rates rather than as capital gains.

Name:	GoneFishin -	Reply
Subject:	Moldy
Date:	8/14/2017 5:43:17 PM

"Government and society condemn the short term, quick buck investors, but then they set up a system that favors the quick buck artist and penalizes the stable, conservative investlrs."

I don't agree. I do alot of trading and I have to pay regular tax rates on profits since they are short term. Government isn't doing me any favors. 

My long term investments are taxed at lower capital gain rates and they are doing me a favor. Indexing would be great...especially if it  applies to income producing property.

Name:	Moldyoldy -	Reply
Subject:	Moldy
Date:	8/14/2017 6:37:04 PM

Yeah gone. I partially agree with you. Its true that short term pays a higher rate, but it doesnt acvount for the effect of inflation on longer term investments. Since reagan got things back into a sembleance of order weve been blessed with a relatively low rate of inflation, but those days are coming to an end. Obama has ensured that we will soon be experiencing double digit inflation once again.

Name:	GoneFishin -	Reply
Subject:	MARTINI....... QUESTION
Date:	8/15/2017 2:08:16 PM

The concept has been around for years. It was vetoed by Carter. India implemented it in 2016. Maybe, we will see it happen.

Would require some effort to index a stock with reinvested dividends.

It would be great if it applies to income property and 2nd homes that were purchased many years ago and subject to capital gains.

One question, where did you read that it would apply to IRA and 401k? I can't see how to index when you have a 401K or IRA for many years trying to determine when you make a withdrawal many years later how the withdrawl is effected by inflation for each stock you purchased with reinvested dividends and stocks you mave have sold over the years since taxes are deferred until withdrawal? I would really enjoy reading how it would work for my self directed IRA as it would really help since withdrawals are taxed at regular rates rather than as capital gains.

Name:	MartiniMan -	Reply
Subject:	MARTINI....... QUESTION
Date:	8/15/2017 2:52:41 PM

Yeah, good question as you are right, 401k and IRA distributions are taxed as ordinary income so indexing will not help.  My guess would be that there should be some indexing for inflation for those earnings as well but I have yet to see that proposal.

Name:	Surfaceunits -	Reply
Subject:	MARTINI....... QUESTION
Date:	8/15/2017 8:07:44 PM

Is there a number the government doesn't lie about

Name:	Talullahhound -	Reply
Subject:	MARTINI....... QUESTION
Date:	8/15/2017 9:13:40 PM

I can answer that: NO.  If the numbers aren't going your way, you just change the basis, the assumptions, or decide the numbers are meaningless. 

That is one of the reason no one wants to quantify anything - because as soon as you, you will be judged into eternity against that number. So then you have to change the way you calculate the number so you can get the nmber you need.