If Congress wanted to enact some good tax policy before they went home to campaign for the fall they could bring up a bill like HR 6057 spnosered by Representatives Mike Pence and Eric Cantor. The Club for Growth, who is key voting cosponsorship of the bill, explains why it is a must-pass:
Right now, American taxpayers are required to pay taxes on capital gains, including the “gains” made through inflation. This bill is a matter of tax fairness. It does away with the tax on inflation, allowing taxpayers to index for inflation the cost basis used in calculating the capital gains tax.
Inflation erodes the real economic gains that can be made by investing capital in the marketplace. Inflation is itself a stealth tax so it’s absurd that Americans should be double taxed on assets that they expose to risk. Removal of this hidden tax will encourage investment that will lead to more innovation, more production, and more wealth.
National Review’s Phil Kerpen:
Fortunately, new legislation sponsored by Reps. Mike Pence (R., Ind.) and Eric Cantor (R., Va.), H.R. 6057, would repeal the inflation tax. The bill would index the tax basis for an asset to inflation, taxing only real gains, not inflation. With the burgeoning investor class making up more than half of voters, this basic fairness issue is sound politics as well as policy. Pence-Cantor is a bill that should become a law.
Much more here.