Authored by Kevin Stocklin via The Epoch Times,
As inflation ticks upward, Republican lawmakers are pushing for capital gains taxes to be indexed to inflation, which could translate into a significant tax cut for American investors, homeowners, and savers.
However, critics say it could put the government further in the red.
A stack of individual income tax forms at the Des Plaines Public Library in Des Plaines, Ill., on March 23, 2006. Tim Boyle/Getty ImagesSen. Ted Cruz (R-Tex.) sponsored the Capital Gains Inflation Relief Act of 2025 to index capital gains to inflation. In March, Cruz and Sen. Tim Scott (R-S.C.) sent a letter to Treasury Secretary Scott Bessent urging him to enact inflation indexing without waiting for Congress. House Republicans sent a similar letter days later.
"Homeownership and long-term real estate investment remain central to achieving the American Dream for millions of families," House Republicans wrote. "Yet under current tax treatment, taxpayers are often required to pay capital gains taxes not only on real economic appreciation, but also on nominal gains attributable solely to inflation."
Thus far, Bessent has not stated his position on the issue. Here's what to know about the proposal.
The Cost of Inflation
Currently, Americans are taxed on assets when they sell, based on the difference between the purchase price and the sales price, or nominal gains. For those who hold an asset long
