When the government inflates the dollar it robs you twice. It makes the money in your pocket worth less. It makes everything you buy more expensive.
And then the government taxes you on the inflation it caused.
Biden’s 21% inflation as president raised the “price” of your house but not the value.
When you sell your home, 21% of the sales price will be Biden inflation. You will pay a capital gains tax on that inflation “gain.”
This has to stop. The government should not double-dip into your wallet by robbing your life savings of their value through inflation and then taxing you on all those phony inflation gains.
The good news is that President Donald Trump can put an end to this. Treasury Secretary Scott Bessent has the ability to end the taxation of inflation in capital gains. Your home, your life savings in the stock market, your small business or farm need not be taxed and double-taxed for inflation when you sell.
Trump pointed out in his first term that he has the power to end this taxation on inflation. Trump said: “Many people like indexing. It can be done very simply. It can be done directly by me.” He’s right.
This is the most powerful pro-growth, pro-affordability act the federal government can do this year. Thirty conservative groups recently sent a letter to the Trump administration in support of the Treasury ending the inflation tax.
Texas Republican Sen. Ted Cruz and South Carolina Republican Sen. Tim Scott this month sent a letter encouraging the Treasury to “eliminate an unfair inflation tax on everyday Americans” to “boost savings, spur investment, and create jobs nationwide.”
Housing prices are skyrocketing and older Americans looking to sell their family sized homes and perhaps move to a warmer (even lower-taxed) state face huge tax punishment as the capital gains on the sale of that home includes perhaps 50% inflation caused by Washington over the decades.
So, many Americans have waited. They stay in a home longer than they want to once the kids have moved out. They delay the sale of their house and delay enjoyment from the value of their largest investment.
They often wait until they pass away and can transfer the house to their children with a stepped-up in basis. Their children will inherit the house without the huge capital gains taxes when they sell it. Why should they have to wait?
Why do so many young couples find it hard to buy a home for their growing families?
The capital gains tax. And post-Biden the huge part of the capital gains tax that results from inflation driving up the ”price” of the house.
Trump and his Treasury Secretary can end the taxation on inflation—by indexing the cost basis of the house to inflation—that inflation tax ends. It is gone. It will no longer stand between homeowners and their ability to access their life savings in their home. Homeowners can sell their homes and retire with the life savings that were built up in their house.
And 63 percent of Americans also own stocks in their IRAs, 401k’s or defined benefit pensions. Those also suffer from taxation on the inflation government created as Americans invested for their retirement over their lifetimes.
Roughly 30 million Americans pay capital gains taxes each year. (That is not the same 30 million each year.) Nearly everyone will have a capital gain at some point in their life.
In the late 1970s when even the Democrats agreed to cut the tax rate on capital gains some argued that the benefits of reducing the capital gains tax would only help “the rich.”
Once again, 30 million Americans a year realize capital gains and pay federal (and state) income taxes on those capital gains. They look like high income earners on paper the year they sell their home, farm or small business. They are certainly taxed as if they are rich.
Inflation is a painful tax on the American people.
It should not be double taxed when Americans sell their home, small business, farm, or stock nest egg.
The time to end this war on “affordability” is now.
Grover Norquist is President of Americans for Tax Reform.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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