<First, just try to get the average schmo to figure out cumulative inflation (watch accountants push for this...).

It really wouldn't be all that different than what people currently have to do when they sell something and have to provide the basis price. Currently, if you sell something for $18 that you bought for $10, you have to list the purchase price, so you're taxed on the $8 gain. All you'd have to add was the year of purchase to the equation and look up the multiplier in a simple inflation table to get the inflation adjusted basis.

Second, most investments are a gamble against inflation. You are betting that over time the value of your investment will go up and will beat inflation. If it didn't well poor you, you lost your gamble. Now cough up.

[sarcasm] That sure sound fair. [/sarcasm].

Third, I imagine the cost would be extraordinarily prohibitive at a period in time where we are about to see the biggest withdrawal of investment moneys ever. Not a Dem or Rep congress could ever go for it (but I'd still like to see the figures).

It'd be interesting to see the numbers. In the past, capital gains tax rate reductions have led to booms in revenue collections as people liquidated old assets they'd been holding onto. Remember, tax rates stimulate behavior. Static analysis is a proven failure in the real world.