Hoping there’s a FReeper out ther who can explain how they would effectively tax unrealized capital gains.
Well, I get that part of it. The part I don’t understand is how one would be expected to come up with the tax payment without selling a portion of the holdings, which would then become subject to actual capital gains taxation. I don’t see how the net effect would not, rather quickly, destroy stocks as an investment.
And for other asset classes like real estate, it’s not really possible to calculate the unrealized gain until a property is actually sold.
Of course I’m assuming that all of the talk about “billionaires” is just window dressing, and that the real intention is to come after Mr. and Mrs. middle America, where the real money is. So yeah, Bill Gates could sell some stock every year and pay this tax without a problem. But the guy with a million bucks in a brokerage account might not so easily come up with an extra hundred grand every year.
It just seems completely nuts to me.