Taxing unrealized gains is based upon no initiating action whatsoever on the part of the stock owner who planned to hold onto those shares to build a long-term retirement portfolio.
Even taxing income is based on the initiating action of the worker converting his labor into compensation. People used to barter labor for goods. Now they barter labor for compensation and then spend that compensation on goods. Multiple taxable events are occurring with these transactions, but no taxable events are occurring to the long-term holder of shares of stocks.
-PJ
If you talked “taxing event” to the Founding Fathers, they would have thought you bonkers.
Articles of Confederation:
To all to whom these Presents shall come, we, the undersigned Delegates of the States affixed to our Names send greeting. Whereas the Delegates of the United States of America in Congress assembled did on the fifteenth day of November in the year of our Lord One Thousand Seven Hundred and Seventy seven, and in the Second Year of the Independence of America agree to certain articles of Confederation and perpetual Union between the States of Newhampshire, Massachusetts-bay, Rhodeisland and Providence Plantations, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, North Carolina, South Carolina, and Georgia in the Words following, viz.
“Articles of Confederation and perpetual Union between the States of New Hampshire, Massachusetts-bay, Rhode Island and Providence Plantations, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, North Carolina, South Carolina, and Georgia.
Article II. Each state retains its sovereignty, freedom and independence, and every Power, Jurisdiction and right, which is not by this confederation expressly delegated to the United States, in Congress assembled.
Article VIII. All charges of war, and all other expenses that shall be incurred for the common defence or general welfare, and allowed by the united states in congress assembled, shall be defrayed out of a common treasury, which shall be supplied by the several states, in proportion to the value of all land within each state, granted to or surveyed for any Person, as such land and the buildings and improvements thereon shall be estimated, according to such mode as the united states, in congress assembled, shall, from time to time, direct and appoint. The taxes for paying that proportion shall be laid and levied by the authority and direction of the legislatures of the several states within the time agreed upon by the united states in congress assembled.
https://www.archives.gov/milestone-documents/articles-of-confederation
Taxing property was the American norm. Taxing income is a more modern thing in the USA, temporarily during the Civil War and about seven years afterward, and permanently starting in 1913.
It is my understanding that Jefferson thought income taxation was unworkable.