I would argue that as a design it has nothing to do with inflation (I'd be happy to consider any evidence that this is its purpose but I am not aware of any). Rather it is more to do with the "bunching" of income when assets are sold. If I earn a return of 10%/yr for 10 years and sell and asset I have to consider all of those gains as income occurring all in the year I sell it rather than 10 years of income.