The Timing

Ted Cruz testified before the Senate Finance Committee this week.

He said Congress should index capital gains to inflation. Capital gains are the profits you make when you sell an investment at a higher price than you paid for it. Indexing to inflation means you pay taxes only on the portion of the gain that exceeds inflation, not the portion that merely kept pace with it. This reduces the tax bill for people who sold investments at a profit.

He said the change would "impact affordability."

He said it needed to happen "before election day."

(Capital gains apply to people who own investments. Approximately half of American households do not own stocks directly. Among those who do, the median portfolio is around $40,000. The people with the most severe affordability problem — the ones paying more for groceries, rent, and medication — are not the primary beneficiaries of a capital gains tax adjustment. Senator Cruz did not address this. He addressed the deadline.)

The election Senator Cruz mentioned is in November. The midterms. The index, if passed, would reduce tax liability for portfolio holders in time for that specific event on the calendar.

He said "affordability" and "election day" in the same sentence. The sentence did not explain how one leads to the other. The Senate Finance Committee heard it anyway.

(I am not making this up. The transcript exists. It says "before election day." I checked whether this is a standard economic policy phrase. It is not standard. The standard phrase is something like "before the end of the fiscal year" or "upon enactment." "Before election day" is a different kind of deadline.)

The bill has not passed. The affordability problem is where it was. The election day is still on the calendar, unchanged by the testimony.

Senator Cruz used two words in sequence: "affordability" and "election day." The order he chose was: first tell people what it fixes, then tell people when it needs to happen. This is a reasonable sequence. The only question is whether the first word is accurate.

It may be. Senator Cruz did not specify which affordability he meant.