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The Tax Policy Network is a community of leading scholars who translate rigorous research into clear, policy-relevant insights on the tax debates that matter most.
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Don’t Index Capital Gains. Fix Inflation.
After several years of above-target inflation, policymakers in Washington are weighing whether to index capital gains for inflation. As things currently stand, capital gains are not indexed to inflation, so when inflation rises, so does the real tax burden investors face. While there are reasons to address this distortion, one overlooked benefit of the current system is that it concentrates the costs of inflation on investors, giving them a powerful reason to demand price stability. Indexation, therefore, may reduce investors’ reason to lobby for lower inflation in the first place, and may, inadvertently, lead to higher inflation.
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our experts
The Tax Policy Network is made up of scholars with deep expertise in tax policy, compliance, administration, and financial reporting. Their research informs how we understand the design, implementation, and real-world effects of tax rules, translating that work into analysis that’s accessible to policymakers, journalists, and the public.
Scott Dyreng
Senior Associate Dean for Innovation, Professor of Accounting
the Fuqua School of Business at Duke University
Jeff Hoopes
Professor, Research Director
University of North Carolina
Rebecca Lester
Associate Professor of Accounting, Senior Fellow
Stanford Graduate School of Business
Martin Jacob
Professor of Accounting and Control
IESE Business School
Maya Chandrasekaran
Program Director
Social Science Research Council