The Retirement Inflation Protection Act of 2021, sponsored on Feb. 11 by U.S. Rep. Tom Emmer (R-MN), would protect retiring Americans from paying inflation-induced capital gains taxes on certain assets. The congressman first introduced the bill in October 2020, but it expired at the end of the 116th Congress.
“I am proud to reintroduce the Retirement Inflation Protection Act to bring relief, especially now, to those seeking a comfortable retirement after their many years of work,” Rep. Emmer said. “Creating this safeguard for retiring Americans’ hard-earned assets will enable them to retire more comfortably.”
If enacted, H.R. 984 would amend the Internal Revenue Code of 1986 to provide for the indexing of certain assets for purposes of determining gain or loss of eligible individuals, according to the text of the bill.
The measure would protect Americans who are at least 59 ½ years old when they sell an asset, like property or stocks, if they have held that asset for at least three years, according to a bill summary provided by Rep. Emmer’s office. H.R. 984 would clarify that taxes are not owed on gains that resulted from inflation.
“Retiring is something Americans save and plan for, and a portion of those savings are often held in assets like a house,” explained Rep. Emmer. “Currently, the tax system inadvertently penalizes our aging Americans for offloading these investments – the very investments that are designed to financially secure their retirement – because capital gains taxes are not indexed for inflation.”
H.R. 984 has been endorsed by AMAC Action, the advocacy arm of the Association of Mature American Citizens, and Americans for Tax Reform.
“No one should have to pay taxes on inflationary capital gains. Congressman Emmer’s bill should be applauded for protecting American seniors from the inflation tax on their life savings,” said Grover Norquist, president of Americans for Tax Reform.
“I look forward to continue working on policies that protect everyone’s financial security, especially those who are heading into retirement,” Rep. Emmer said.