People can yowl about this all they want, however, the capital gains exemption was put in place at a time when there was much less international capital flow related to residential real estate.   

It wasn't uncommon for people to own a home 40 or so years ago and see relatively little capital appreciation on it, even after 8 to 10 years.   There was a good reason for the exemption.   Now I am not convinced this exemption makes sense anymore.

Oh - and to ease the pain, it can be phased in.   Put the first two stages in place (out to five years) and then the next two after a couple of years or so.   Someone must have some kind of data to sort this out (even if rough), and, if not, that's the first priority.