re: #2 mikiesmoky2

The investor does bear the risk of decline.

Please explain your question with a wee bit more specificity.

Correct, I did not mean to imply that the investor bears no risk. However, trying to scale (i.e., via CPI or any similar means) the taxable amount essentially tries to scale the risk and thus shield the investor from the full consequences of a poor performing asset.

This gets down to the whole idea of why we “tax” and how we do it in our society.

I propose a proper way to approach the taxing of “gains” is to realize that only the present and future matter as far what can be changed in life - the past cannot be changed.

For example, which is more important: lost value due to inflation, or, other opportunity costs?

Income from wages are taxed on face value - even if wages become less valuable due to inflation over the period of the tax year (something we’ve not had to worry about the past few years because of very low inflation, but in previous times where double digit annual inflation manifested.) More important still, taxes on wages are really taxes on time, since the hours expended in labor can never, never, be returned, unlike so called “capital” assets which, even if depreciated due to inflation, can be sold for some value.

In other words, I question how we have come to value our lives when we tax life expended rather than tax negotiable and tradable “assets”.

And life is the ultimate depreciating asset since we only have some finite quantity of hours to expend.

I’m trying to make the case that “capital” really ought to be taxed and that tax ought to be seen as an important way that we pay for our civilization. This is contrary to the current winds blowing the “conservative” pundits and politicians, who seem to think that there should be no inheritance taxes or capital asset taxes, but only wages and retail (or wholesale via VAT) commerce ought to be taxed.

I realize that you didn’t call for total elimination of capital gains, however the political operatives who are trying to stir up the populace for a major tax system overhaul are strongly intent on ending capital gains and inheritance taxes.