Paul Atkins writes in an op/ed in Real Clear Markets:
The tax reform bills moving rapidly through Congress ... would leave more in the pockets of working Americans and reduce the role that taxes play in financial decision-making, allowing people to take their own paths without much help or hindrance from Washington.
But one provision in the Senate version of the bill would restrict Americans’ ability to make their own financial decisions. The measure would dictate how investors manage their portfolios of stocks, bonds and other securities.
The Senate bill would mandate a first-in, first-out (FIFO) scheme. When investors who hold multiple positions in the same security decide that it is time to sell, the government would force them to sell their oldest shares first. Requiring stock sales to be made on this FIFO basis will usually mean higher taxes for investors who sell their holdings accumulated over time. The FIFO provision’s tax implications will limit the ability of American households to fully realize gains from successful investments.
