Name:   MartiniMan - 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.