Re:Washington state approves capital gains tax
by dragonwriter on Saturday May 01, 2021 @10:46AM
(#27006741)
> Should the calculation of capital gains take inflation into account?
There is a good argument that capital gains, for fairness, should be taxed the same as other income, on a value calculated by adjusting the basis value for inflation. (Which is very different from maintaining current policy but for adjusting basis value.)
But fairness doesn’t seem to be a motivating principle of the existing capital gains tax in the first place. If you look at it as an effort to encourage the shortest possible “long-term” holding, the existing policy makes perfect sense.
There is a good argument that capital gains, for fairness, should be taxed the same as other income, on a value calculated by adjusting the basis value for inflation. (Which is very different from maintaining current policy but for adjusting basis value.)
But fairness doesn’t seem to be a motivating principle of the existing capital gains tax in the first place. If you look at it as an effort to encourage the shortest possible “long-term” holding, the existing policy makes perfect sense.