The way capital gains are calculated... for tax purposes... they are largely a TAX ON INFLATION. Not only does a successful investment appreciate over time... but the value of the money in which it is calculated has diminished. "Fairness" would require a capital gain to be indexed to the CPI. Urban blight is also a result of the tax on capital gains. Landlords become frozen into income property investments... lest a significant share of their sale proceeds be taxed away. Often they wait till they die, so their heirs can benefit by the readjustment of the tax basis on the death of the owner. Imagine what that does to the physical condition of the property.