Why pay higher prices in a more competitive housing market when you can just keep paying compulsory taxes on your capital gains? That’s effectively the head-scratching argument CNN tried to make to ding President Trump’s tax-cutting agenda.
Yeah, we couldn’t really make sense of that logic either.
CNN Situation Room co-anchor Pamela Brown tee’d up business and politics correspondent Vanessa Yurkevich July 23 to spin that “homeowners certainly will benefit” if Trump chooses to eliminate the capital gains tax “but at a cost.” What does that even mean?
Apparently, Yurkevich doesn’t consider capital gains taxes to be a “cost” in itself, given that it potentially applies to practically any profit made when selling a capital asset. The net negative, according to Yurkevich’s bizarre argument, is that the inevitable rise in inventory will come with an increase in demand bolstered by an increase in sales, which will then translate into higher prices for home buyers. In layman’s terms, people being able to keep more money will make the housing market more competitive with its prices and that’s somehow a bad thing!
“This will likely raise home prices because of that increase in demand. So while homeowners will basically be able to have more of a selection in the homebuying market, they will likely have to pay higher prices,” Yurkevich spun. “Yes, [homeowners] may win on the side of this capital gains tax going away, but they’ll probably have to make up for that Pamela with higher home prices eventually.”
The brain hurt in this reasoning is beyond ridiculous.
CNN: Paying less in taxes is a bad thing. pic.twitter.com/flqiJU4FxU
— Nicholas Fondacaro (@NickFondacaro) July 23, 2025
Of course, this lunacy glosses over the fact that home sellers would only have to focus on the transaction with buyers without having to worry about giving a portion of their profits to the government if said profit just happens to surpass the $250,000 tax exemption threshold for owners of a single-owned home and the $500,000 exemption for a couple-owned home. But hey, why gripe about the pesky details, right?
And this banter is aside from the fact that taxing capital gains has been a stupid notion to begin with, since those gains are simply the conversion of capital into cash and not necessarily a furtherance of economic activity, as the Tax Foundation analyzed in 2014. “Converting an asset into cash does not make the investor any better off in economic terms, the asset has just been recategorized into cash,” the Tax Foundation reasoned. The tax, in effect, is pretty much just a “tax on asset transformation and reorganization.”
Economist Richard Rahn called the capital gains tax in 2021 “one of the worst inventions of mankind.” He pointed out that appreciation in asset value is also a result of inflation. In effect, argued Rahn, “There is nothing fair about the IRS taxing government-caused inflation. Some excellent tax lawyers have argued that there is no basis in law for taxing the inflationary portion of capital gains. It is merely something the IRS decided to do on its own – without a law – decades ago.”
But eliminating this tax burden altogether is somehow a “cost” that consumers should be worried about, according to CNN’s world.
Somebody get these journos an economics textbook, please.
NewsBusters Associate Editor Nick Fondacaro contributed to this report.