May 14, 2012
Bartlett: If Romney Wins, Will He Index Capital Gains by Presidential Fiat?
While Romney's views on this subject are as yet unknown, I expect that the same people who have been pushing capital gains indexing for decades will pressure him to support unilateral indexing -- and there's a very good chance he will go along. [Although the Department of Justice and the Treasury Department concluded in 1992 that that such authority did not exist, Romney] can cite for support a recently published article by Cooper and Colatriano in a respected academic journal arguing that not only was their earlier opinion correct, but that subsequent court cases have strengthened their argument [The Regulatory Authority of the Treasury Department to Index Capital Gains for Inflation: A Sequel, 35 Harv. J.L. & Pub. Pol'y 487 (2012)].
Not being a lawyer, I won't offer my own opinion on whether capital gains can be indexed to inflation by executive order. I do think it would be a bad idea politically. Regardless of which party controls Congress, it tends to jealously guard its prerogatives. I expect that even if Congress is under Republican control, the chairs of the Senate Finance and House Ways and Means committees would strongly recommend that indexing be done legislatively and not by presidential fiat.
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