The Government Prints the Inflation, Then Taxes You on It. That Is Not a Mistake.

They Create the Problem and Then Collect a Fee for It

I want you to think about something that almost nobody in mainstream financial media will say out loud. The federal government prints money. That money printing causes inflation. Inflation drives up the nominal value of your investments. Then the government taxes those inflated gains as if every dollar is real profit.

They manufacture the inflation. They collect the tax on the inflation. And they call it capital gains.

I call it what it is: a double tax on your savings, and the mechanism is so baked into the system that most people never even see it happening.

Real Inflation Is Not What They Tell You

Let’s start with the numbers the government does not want front and center. The official inflation figures are, to put it charitably, incomplete. When you actually look at what everyday Americans spend money on, food, energy, rent, transportation, my honest assessment puts real inflation closer to 8% in recent years, maybe higher for people without a lot of financial flexibility.

So when your portfolio shows a 10% gain, here is what actually happened:

• Real purchasing power gain: roughly 2%, if you’re lucky.
• Taxable gain according to the IRS: the full 10%.
• Capital gains thresholds are not adjusted for inflation.
• The money the government printed is the reason your portfolio looks bigger in nominal terms.
• Then they hand you a tax bill for it.

Prove me wrong. I genuinely invite anyone defending this system to explain why it is not a double tax. I’ll wait.

The Politicians Who Make It Worse

Here is a moment that stuck with me. In a 2008 presidential debate, moderator Charlie Gibson presented Barack Obama with documented evidence that lowering capital gains taxes under Bill Clinton actually increased Treasury revenue. More money came in. The data was clear.

Obama’s answer was that he wanted to raise capital gains taxes anyway. For fairness.

Not for results. Not for economic evidence. Fairness. That is ideological tax policy divorced entirely from what works, and it is the kind of thinking that continues to chip away at what you have built over a lifetime of working and saving.

The 60/40 Portfolio in This Environment Is Financial Malpractice

I will also say what too many advisors still will not say. The 60/40 portfolio is a relic. In an inflationary environment driven by government money printing, a significant bond allocation is a guaranteed slow loss of purchasing power. You are not being conservative. You are being quietly drained.

You have to outrun inflation. That is not aggressive investing. That is basic financial survival.

What Honest Investing Looks Like Here

• Measure everything in real, after-inflation, after-tax terms. Nominal gains are a distraction.
• Understand that a big portion of recent portfolio growth is asset inflation, not alpha. Be honest about it.
• Demand that your advisor explains real returns, not just the headline number.
• Rethink any heavy fixed-income allocation while the government continues printing at scale.

The system is designed to take twice. Knowing that is how you start building a strategy to keep what is yours.