Suppose you buy something for $100 and sell it for $120 later. You pay tax on $20.
But what if the $120 buys less than the $100? We do we pay tax on our lost purchasing power?
Discussion
So you're referring to paying capital gains tax? Like securities or ordinary income?
Yeah. Basically any tax the federal government gained the power to levy by the 16th amendment to the constitution.
All I was able to find from a quick search was a write-up from a think tank on the topic from 2018. Lots of good argumentation provided.
https://taxfoundation.org/research/all/federal/inflation-adjusting-capital-gains/
Interesting. AFAICT, the government has merely assumed the authority to tax nominal gains, but this is contrary to what the constitution says in the amendment granting the federal government unequal taxation power on income.
Because taxes are theft. There's no reason for them to maintain the illusion of justice because at the end of the day we pay taxes because we have to, not because we want to.
Also, inflation is just another tax, but it's a hidden tax. They certainly don't want to do anything to draw attention to their midnight robbery. Making it a legal tax code issue would open the government up to lawsuits about how they report inflation, and that would risk exposing how much they lie about the true rate of inflation. Which would mean more COLA on Social Security and less revenue from capital gains taxes, all of which is the opposite of what the parasite class wants.
And the fact is, most capital gains are just inflation anyway. That's the whole purpose of the tax. You invest in assets to avoid the inflation tax, but they can't allow that so they punish you by taxing you on the inflation you tried to avoid.
No, the house you bought 20 years ago that needs a bunch of repairs and constant maintenance now isn't an "investment", and the massive increase in its price isn't a gain in your capital, it's just inflation.
Maybe someday when bitcoin moons this will be challenged by rich people in court.
Maybe. But most people with enough wealth to access the banking system avoid capital gains tax anyway, by borrowing against assets instead of selling the assets, then writing off the interest as a tax deduction.
Good point. One would be foolish to sell now. And when / if bitcoin volatility settles down, one would expect bitcoin price to still rise by inflation, and one would not expect inflation In paper currency to disappear because bitcoin appeared.