Taxation of inflated pseudo-profits

In the US, the financial unit of account is the US dollar. The right to money vests with the government; you have no right to a store of value, and government can pillage what value you might think you have at will, and without representation or due process.

26 U.S.C. § 61 of the Internal Revenue Code defines "gains from dealings in property" as one type of income. The word "gain" means a gain in the established financial unit of account, not a material gain (an increase in purchasing power).

[[MORE]]Let's say I buy stock (a form of property) for $100 and sell it a year later for $105, but inflation was 10% for that year. I'm taxed on the $10 nominal "gain," even though I've actually lost $5 worth of purchasing power.

The situation gets worse as inflation rates rise. Imagine that inflation is 100% per year. You buy a stock for $100 and sell it a year later for $150. You've lost $50 in purchasing power, but the government would tax the $50 pseudo-profit, thereby increasing your loss.

Eliminating the tax on capital gains would help to mitigate the damage here, although inflation and forcing the dollar as the unit of account are the also a big part of the problem.