Tax Foundation study recommends inflation indexing for capital gains

12/19/2013 | AccountingWEB

A study from the Tax Foundation recommends that capital gains be taxed at a rate indexed for inflation so that the tax reflects real increases in income rather than inflation. The study authors, John Aldridge and Kyle Pomerleau, found that for an average stock purchased in 2000 or 2007 and sold in 2013, the tax would be based entirely on inflation-related gains. Indexing the basis of the gain to inflation would ensure the tax was levied on actual profits, according to the study.

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