Fortune-Telling the Future of Tax Reform

“The president has repeatedly stated that he knows he has the authority to end the taxation of inflation on capital gains through executive action that does not require Nancy Pelosi’s approbation. The 2002 Verizon Communications Inc. v. FCC Supreme Court decision said an agency could define cost as “cost plus inflation,” and doing this would take the inflation gain out of what is taxed when you sell land, a home, a building, or stocks in your 401(k).

For instance, if you bought a share of IBM stock in 1970 for $14.81 and sold it today for $134.42, you would pay $28.46 in capital gains tax. Removing the inflation from that gain reduces your tax bill by 70 percent.

This is a big deal for millions of voters. Older Americans have a great deal of inflation in capital gains in their property, stocks, and 401(k) accounts. Rural Americans have land the value of which today is largely the result of inflation build up inside the nominal value.”  Grover Norquist, “Fortune-Telling the Future of Tax Reform.” American Spectator, 12/30/2019.

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