Progressive Taxation

Subprime discrepancies should be mitigated where capital gains are adjusted to Consumer Price Index increases for inflation. This would take into account the seller’s initial cost and selling price. Any costs the buyer incurs due to seller gouging, would be taxed from the seller into an FHA account. The over-inflationary funds would be appropriated into an FHA account for securing buyer mortgage defaults. When the purchaser defaults, FHA steps in and reallocates the funds from the buyer’s account to the foreclosure mitigation.

2006 Tax Deduction On Sale Of Capital Gains
Years Owned	Year Accrued	Appreciated CPI	% Of Original Cost Deductable Upon Sale
1	2005	196.8	((	196.8	/	190.3	)	-	1)	=	3.4157%
2	2004	190.3	((	196.8	/	184.3	)	-	1)	=	6.7824%
3	2003	184.3	((	196.8	/	180.9	)	-	1)	=	8.7894%
4	2002	180.9	((	196.8	/	176.7	)	-	1)	=	11.3752%
5	2001	176.7	((	196.8	/	174.0	)	-	1)	=	13.1034%
6	2000	174.0	((	196.8	/	168.3	)	-	1)	=	16.9340%
7	1999	168.3	((	196.8	/	163.9	)	-	1)	=	20.0732%
8	1998	163.9	((	196.8	/	161.3	)	-	1)	=	22.0087%
9	1997	161.3	((	196.8	/	158.6	)	-	1)	=	24.0858%
10	1996	158.6	((	196.8	/	153.5	)	-	1)	=	28.2085%
11	1995	153.5	((	196.8	/	149.7	)	-	1)	=	31.4629%
12	1994	149.7	((	196.8	/	145.8	)	-	1)	=	34.9794%
13	1993	145.8	((	196.8	/	141.9	)	-	1)	=	38.6892%
14	1992	141.9	((	196.8	/	137.9	)	-	1)	=	42.7121%
15	1991	137.9	((	196.8	/	133.8	)	-	1)	=	47.0852%
16	1990	133.8	((	196.8	/	126.1	)	-	1)	=	56.0666%
17	1989	126.1	((	196.8	/	120.5	)	-	1)	=	63.3195%
18	1988	120.5	((	196.8	/	115.4	)	-	1)	=	70.5373%
19	1987	115.4	((	196.8	/	110.5	)	-	1)	=	78.0995%
20	1986	110.5	((	196.8	/	109.3	)	-	1)	=	80.0549%

Excise Amount		Excise Rate		Original Cost
$5,000	/	1.00%	=	$500,000
$5,000	/	2.00%	=	$250,000
$5,000	/	3.00%	=	$166,667
$5,000	/	4.00%	=	$125,000
$5,000	/	5.00%	=	$100,000

Example
Steps	Procedure	Answer
#1	Enter the current tax filing table's year:	2006
#2	Enter answer #1 minus one year:	2005
#3	Use answer #2's year to find answer #1's last CPI (years owned = 1):	196.8
#4	Enter the year in which the asset was purchased:	1991
#5	Use answer #4's year to find first CPI (years owned >= 1):	137.9
#6	Divide answer #3 by answer #5:	147.0852%
#7	Subtract 100% from answer #6:	47.0852%
#8	Enter original cost of asset:	$250,000
#9	Enter selling price of asset:	$400,000
#10	Subtract answer #8 from answer #9 (desired appreciation):	$150,000
#11	Multiply answer #7 by answer #8 (reasonable appreciation - tax exempt):	$117,713
#12	Subtract answer #11 from answer #10 (unreasonable appreciation - taxable):	$32,287