Fiscal conservatives are crying in their beer over the word that the president is unlikely to issue an Executive Order directing agencies to disregard non-binding earmarks. As if to soften the blow, Stephen Moore reports today in the Wall Street Journal's Political Diary (subscription only) that Bush may use an Executive Order to index the capital gains tax for inflation:

We've learned that the White House is seriously considering a plan to index capital gains taxes for inflation as part of its economic stimulus package. This would be done by an executive order by the President, not through legislation. Under the executive order, the Treasury Department would define "cost" in assessing capital gains taxes as "historical cost plus inflation."

It's about time. Such an order would undo an injustice in the tax code that means, as a new National Center for Policy Analysis report puts it, that "investors pay billions of dollars of tax on phantom gains." The American Shareholders Association strongly supports indexation and argues that if Congress were to challenge or overturn President Bush's order, "this would make the November election worth tens of thousands of dollars for millions of Americans. They would not forget."

This idea is anything but new. It was suggested at least as far back as the first Bush presidency, and pro-growth advocates in Congress have introduced legislation to require the change. It has vocal proponents in the current debate as well.

In many ways, the idea seems a no-brainer. In contrast to many other proposed economic 'stimuli,' there's little disagreement that this would help boost economic activity. Further, it would not require Congressional approval, and could be put in place immediately -- rather than months from now. This is in dramatic contrast to most (if not all) of the other proposals currently on the table.