Tax Guru-Ker$tetter Letter
Thursday, August 22, 2002
Adjusting Capital Gains For Inflation
History repeats itself yet again. There is a lot of discussion of changing the tax law to allow capital gains to be adjusted for the effects of inflation. The underlying assumption is that Congress has to pass such a law. That is not true. Bush doesn't have to wait for Congress to change the law to adjust the cost basis of capital assets for inflation. He has the power to do this on his own.
Back in 1992, Bush 41 was encouraged to do just that; but he wimped out because it would have been too confrontational. I am afraid that Bush 43 is just as timid. While he talks tough on the war on terrorism, he is scared to death to take on the liberals on domestic issues, such as taxes.
I have written extensively about this topic, including this.