Unfinished Tax Reform, How Inflation Still Increases Your Taxes
While the Trump tax reform provided a nice boost to the economy there is still unfinished business. Specifically, all our taxes are NOT indexed for inflation, which is bad. This needs to change. No more unvoted for tax increases.
- Income levels for Social Security benefits.
- A number of homeowner tax benefits erode with inflation.
- The $10,000 limit on state and local tax deductions enacted in the 2017 law also isn't indexed for inflation.
- Inflation indexing isn't applied to the amount of tax-free gain on the sale of a principal residence.
- The most egregious is the $3,000 limit on net long-term capital losses that can be deducted against other income. That limit hasn't changed since 1978.
Thanks to Bob Carlson's Retirement Watch for critical information on automatic federal tax increases, all of them need to be indexed for inflation.