Intel Corp (INTC)

[willco]

One more thought to add to the mix. After about 20 years of home ownership and a couple of corporate moves I figured my accumulated gain on the three houses I had owned. At that time I was pretty pleased with the increase in my wealth. Then I looked at the accumulated rate of inflation over those same years and discovered that economically I had not gained a blessed thing. If I had cashed out at that point I would have paid a capital gains tax on what are essentially phantom profits. As a result of the tax I would have had an economic loss; although a very neatly disguised one.

In the world of people who are interested in tax policy these kinds of issues have widely discussed over a long period of time. The fact that inflation gains are not economic income is an underlying consideration for the decision to tax capital gains at a lesser rate than ordinary income. And also why shorter term gains are taxed at a higher rate than long-term gains. Last I looked at UK taxation people and companies are allowed to deflate their gains before they are taxed.