How the Capital Gains Tax Locks Americans in Place

Adam N. Michel

Recent Republican proposals to exempt capital gains on certain home sales are a useful reminder that the capital gains tax distorts economic decisions and harms Americans. The Republican Study Committee (RSC) recently proposed eliminating capital gains taxes on rental home sales to tenants and on home sales to first-time buyers. President Trump has repeatedly floated expanding the exclusion for capital gains on primary residences. These ideas are partial fixes for a much broader distortion in the tax code.