And just to remind everyone again, capital gains tax should be indexed for inflation.
It's ridiculous to pay tax on nominal gain which is just extra dollars needed to offset the dollar's loss in value.
Inflation Calculator | Find US Dollar's Value from 1913-2012
Suppose:
You bought an asset in 1990 for 1,000,000.
You sold it in 2012 for $1,770,000.
You would be taxed on $770,000 of gain, even though it hadn't gone up in value at all.
Consider what would happen if gov eliminates the loophole for tax free gain on your home.
Suppose:
Your parents bought a home in 1970 for 100,000.
Your parents sell it in 2012 for $596,000.
They would be taxed on $496,000 of gain which is entirely due to the dollar's having lost most of its value.
Since inflation is created by the fed expanding the money supply faster than the economy grows, this amounts
to wealth confiscation. Moreover, it's imposed only upon those who need to sell. Those who don't sell their
assets, avoid the tax on phantom income.