Inflation is a good reason why long term capital gains rates are lower than income tax rates.
You can argue about the timeframe and getting the whole break after 1 year versus maybe giving larger breaks the longer you hold, but that’s the weeds.
Principal should be adjusted for inflation. If I invest $10k and the investment is worth $11k today but we’ve experienced 10% inflation in that time then my actual profit is 0 and I should pay no tax on the $1k of proceeds.
I support minimum wages adjusting for inflation. Keep in mind most wage workers don’t pay taxes. And in fact actually receive credits which give them more back than they paid in. I’m not against that but it should be considered. If anything, include an inflation credit.
You can argue about the timeframe and getting the whole break after 1 year versus maybe giving larger breaks the longer you hold, but that’s the weeds.