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Author: rayvt ✧  😊 😞
Number: of 15492 
Subject: Re: OT Push to index capital gains
Date: 07/10/2025 6:34 PM
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Some part of the reason for the lower rate on cap gains is presumably the assumption that there has been some inflation during the hold period,

A big part of the reason for capital gains to be taxed less than ordinary income is to encourage investments. That's partially the rationale for taxing long-term gains lower.

The whole business of a separate capgains rate is silly. It used to be taxed on on 1/2 the gain at the same rate as ordinary income. That was much simpler.

The basis should be indexed by the inflation rate, because the non-indexed rate is just taxing a phantom profit.

But those two reason is probably why they won't index. Because those two things got more tax revenue.
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