Inflation is driving up costs. But there's a simple policy change that could make a real difference.

Right now, the IRS taxes inflation as if it were real income. When your home, retirement savings, or small business increases in value because of inflation, you still pay taxes on the full gain.

That means millions of Americans are being taxed on "phantom gains."

Grover Norquist of Americans for Tax Reform explains how indexing capital gains for inflation would fix this problem by ensuring taxpayers only pay taxes on real gains. He outlines how this reform could be implemented, why it would boost investment and economic growth, and how it could improve affordability across the economy.

This isn't a new idea. Policymakers in both parties have supported it in the past because it's practical, fair, and pro-growth.

If lawmakers are looking for a clear, immediate step to address inflation and costs, this is one of the most straightforward options.