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I'm not sure that would work as simply as that. Imagine buying a volatile stock, say, TSLA at $100. This then skyrockets to $1000. You're now taxed on your weal
by harshalizee 6y ago
I'm not sure that would work as simply as that. Imagine buying a volatile stock, say, TSLA at $100. This then skyrockets to $1000. You're now taxed on your wealth at that price point.
Then it immediately crashes down to $120.
All this while, you're just holding the stock but paid taxes on a non existent value.
- acjohnson55 6y agoI haven't thought this through, but could that actually be a feature?
- xur17 6y agoI'm not sure it would - it seems like this would discourage risk taking. Owning stock in a startup would be a terrible move in this case.
- masklinn 6y agoStill sounds like a feature. The unicorn chase for value explosion is not a positive.
- ajmadesc 6y ago_Most_ capital is not put at "risk".
- acjohnson55 6y agoIt would certainly discourage risk taking on highly volatile instruments, and I'm not so sure that's a net contributor to the economy.
- cmeacham98 6y agoPerhaps substitute the (inflation adjusted) price you bought the stock at? Or maybe something like a rolling average of the past month/year?
- ganafagol 6y agoThis is a solved problem. For taxation purposes, just integrate over all price points in the taxation interval. In other words, average it.