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Walberg Supports Legislation Ending the Inflation Tax

Date: March 8, 2007
Location: Washington, DC
Issues: Taxes


WALBERG SUPPORTS LEGISLATION ENDING THE INFLATION TAX

U.S. Congressman Tim Walberg (R-MI7) today announced he has co-sponsored legislation that would end the inflation tax on capital gains, a measure introduced by Rep. Mike Pence (R-IN) and Rep. Eric Cantor (R-VA).

"Hard-working families in south-central Michigan and across the United States should not be taxed on inflationary increases," Walberg said. "Currently, taxpayers pay taxes on both real economic gains and increases from mere inflation. This legislation would eliminate the inflation tax, reduce the tax burden for millions of Americans and encourage investment to strengthen our economy."

BACKGROUND:
H.R. 1261….

- Would index for inflation the cost basis used in calculating the capital gains tax on assets purchased in 2008 or later
- Had 97 cosponsors and the support of numerous taxpayer advocacy groups during 109th Congress
- Would allow individual taxpayers who hold an asset for more then three years not be taxed on inflationary gains as determined by the "gross domestic product deflator"

The current system of taxing inflation encourages short-term investment and speculation, since long-term investments are taxed on inflation gains

http://walberg.house.gov/News/DocumentSingle.aspx?DocumentID=60162

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