[sokoloff]

I would agree with you on the capital gains point iff we indexed the basis of properties to inflation.

Because we don't, much of what we call "capital gains" are "return of capital, measured in a greater number of now less valuable dollars". Return of capital should not be taxed.

[epistasis]

Is there any other capital gains asset that has an inflation indexed tax basis? I'm not aware of any.

Real estate land gains tend to dwarf any inflation effect, so it's a pretty minor tweak to include, anyway.

Tax treatment of depreciation of buildings is also a big factor here.