Royalty income receives no inflation adjustment despite similar deferral to capital gains

Evidence

None of the arguments, however, are persuasive. First, for most of the twentieth century our tax rates on capital gains were higher than they are now, and the markets functioned effectively, with minimal lock-in effect. Second, the potential effects of inflation may also be overstated, since you only have to hold stock one year and a day to get the preferential rate—and there is no inflation exception for any other type of income that accrues over a period of time. Take, for example, royalty income from books: If I write a book this year, it does not produce income until it is published; then it produces income every time a book is sold. The income I receive five years from the book’s publication date is attributable to the labor of writing the book several years earlier, but no one ever argues there should be an inflation-adjusted amount of royalty income included as taxable income. — Dorothy A. Brown, The Whiteness of Wealth, 446