The solution you propose also sounds really complicated when people have to optimize the timing of when they make capital gains with times when the risk-free rate is low.
When you sell assets you deduct the amount you paid for them. The proposal is to multiply that basis by the total amount of risk-free interest that would have accumulated over the intervening period, which can be calculated by looking up a single number in a table. I agree that using the risk-free rate when you sell would be insane.
(From the perspective of tax optimization, I think this is much simpler than the status quo. From the perspective of tax accounting, this mechanism takes the place of the distinction between long-term and short-term capital gains, and is radically simpler than that.)
When you sell assets you deduct the amount you paid for them. The proposal is to multiply that basis by the total amount of risk-free interest that would have accumulated over the intervening period, which can be calculated by looking up a single number in a table. I agree that using the risk-free rate when you sell would be insane.
(From the perspective of tax optimization, I think this is much simpler than the status quo. From the perspective of tax accounting, this mechanism takes the place of the distinction between long-term and short-term capital gains, and is radically simpler than that.)