When you realize a sale, you are paid in today’s dollars.
You’re drawing a distinction without much of a difference. In the case of an asset disposition, what you really mean to say is that you are comparing proceeds into “today’s dollars” with cost is the dollars from some time in the past. If my holding period is 100 years, well, that can be severe.
But when we talk about real wages being stagnant for the last several decades, you have the same problem. Strictly speaking, we should pick an index year, and operate off that for computing taxable wages.
But we do seem to agree that indexing to inflation is more trouble than its worth.
FTR I do not think I am engaging in populist politics. Fact is that when I’m retired, my average tax rate will probably go down just because I don’t have a W-2 anymore. If I make 100k in a given year, I am in the same position from a net worth standpoint if I got that 100k on my W2, or if I owned an asset which increased in value by 100k during the year, and sold it. That’s just fairly simple reality, not populism.
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In response to this post by Hoodafan)
Posted: 08/10/2020 at 1:49PM