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Clifford Asness, co-founder and chief investment officer of AQR Capital Management, has called for the U.S. tax system to index capital gains for inflation.
In a recent statement, Asness described the current approach as ''crazy,'' emphasizing that taxing nominal gains may overstate actual investment income due to inflation. He suggested that if indexing results in a reduction in tax revenue, raising the capital gains tax rate could offset the effect. ''Higher rates but indexed to inflation, perhaps coming to a similar total, makes much more economic sense,'' Asness stated. The proposal aims to ensure the tax code more accurately reflects real investment returns, a topic of ongoing debate among policymakers.