Lankford, Cruz Work to Relieve Pressures of Inflation Caused by Democrats Excessive Spending
WASHINGTON, DC – Senators James Lankford (R-OK) and Ted Cruz (R-TX) today introduced the Capital Gains Inflation Relief Act, legislation to ensure an individual’s cost basis in a capital asset receives the same fair and equitable tax treatment as other provisions of the tax code by indexing the basis for inflation. According to the US Bureau of Labor Statistics, inflation has increased 5.4 percent from September 2020, which matches the highest rate since 2008. Congressman Warren Davidson (R-OH) introduced companion legislation in the House.
Lankford and Cruz were joined in introducing the legislation by Senators Thom Tillis (R-NC), Mike Braun (R-IN), John Barrasso (R-WY), Pat Toomey (R-PA), and Jim Inhofe (R-OK).
“Oklahomans are feeling the impact of Biden’s skyrocketing inflation from the grocery store to the gas pump,” said Lankford. “Instead of addressing their bad policies that have caused inflation, Biden and the Democrats continue to double down on spending trillions of dollars in a new government spending that will make inflation even worse. We should encourage savings and investments to protect hardworking Americans from the consequences of Democrats’ irresponsible, reckless spending.”
“The Biden administration’s inflation crisis is causing prices to skyrocket, destroying the purchasing power of Americans’ hard-earned dollars,” said Cruz. “By indexing the cost basis of capital assets to inflation, we are protecting hardworking Americans from being punished by the cruel tax of inflation created by this administration’s reckless spending. This bill would promote savings and investment, encouraging people to save for things like a child’s college education and for retirement, and would, help job creators hire more people and raise wages when Americans need it most. I will continue to lead the fight in the Senate for a fairer, simpler tax code and for fiscal sanity as this administration threatens to destroy the wealth of Americans.”
The Treasury Department currently determines capital gains taxes by the sticker price at the time of purchase without considering the inflation-adjusted cost of the asset in today’s dollars. As a result, an individual who sells a capital asset must pay tax on the gain even if the asset’s value only grew and kept pace with inflation.
The Capital Gains Inflation Relief Act indexes certain assets to inflation for the purpose of determining a gain or loss which ensures the capital gains tax is treated equitably to other sections of the federal tax code, such as individual income tax brackets, the standard deduction, and income thresholds of certain tax credits.
Lankford has been vocal about the negative impacts inflation has had on Oklahomans. He penned an op-ed on economic chaos inflation has caused for Oklahoma’s families. In a floor speech, Lankford called on the Senate to push policies that promote work rather than more entitlements and massive spending that will only make inflation worse.