Mr. Jones buys 100 shares of XYZ stock in 1990 for $1,000. In 1999, he sells it
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Mr. Jones buys 100 shares of XYZ stock in 1990 for $1,000. In 1999, he sells it for $1,820. In 1999, he paid a 40 percent combined state and federal tax rate on his $820 profit. During that time, the CPI went from 100 to 130. How much in real value did his stock go up? What percentage of his real profits was taxed? How could the government prevent inflation from making this tax rate so high?
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