U.S. Capital Gains Tax Inflation Adjustment Bill Reintroduced, Including Digital Assets

Republican lawmakers in the United States are pushing for a measure to adjust capital gains tax thresholds in line with inflation, with discussions also including the taxation of digital assets. Senator Ted Cruz introduced Senate Bill S.798, titled the 'Capital Gains Inflation Relief Act of 2025,' on February 27, 2025. This bill aims to adjust the cost basis in asset profit and loss calculations according to inflation. In the House of Representatives, Congressman Warren Davidson has introduced a similar bill, H.R.1857. The key point is to exclude the inflation component from the nominal gains realized upon the sale of assets from taxation. Cruz's office explains that this bill links the cost basis of capital assets to inflation and confirms that digital assets are included. As a result, it could potentially apply to cryptocurrency investors, such as those holding Bitcoin. However, the focus of this discussion is on a broad capital gains tax system that includes stocks and real estate. Some Republicans are calling for executive action, arguing that the Treasury could adjust capital gains tax to inflation under existing authority. Opposing views focus on legal authority and financial burdens. Budget impact is also a contentious issue, with estimates suggesting that retroactive application to all capital gains could cost nearly $1 trillion over a ten-year budget period. Currently, both bills remain in committee stages.

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