Let's do a thought experiment. For this experiment, assume the tax rate between $100K and $200K is 20% and between $200K and $300K is 30%, and stays the same over a two-year period.
In year 1, a person makes $200K, but has unrealized gains of $100K. So, in that year, he pays $30K in additional Fed. taxes ($100K*30%).
Now, in year 2, the person make again $200K, but has unrealized losses of $100K, wiping out all of the gains from the year before. So now, he gets back $20K ($100K*20%) from the Fed for his losses.
So, over a two year period, the person has a net gain of $0, but has paid a net of $10K in additional taxes.
I think you stated it perfectly.
Where you and I differ is that this law only applies to people making 100,000,000 annually. So the incremental tax rate would not change.
I agree that this is a stupid—and probably unconstitutional—”law.” I don’t think it would last 90 days before an injunction.
Wealth taxes are pretty stupid once you get past the “lets eat the rich” BS.