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Why not tax, at least for publicly traded stocks, the unrealized capital gains? (taking e.g. the last price of the year as basis) In addition to the problem me
by occamrazor 4y ago
Why not tax, at least for publicly traded stocks, the unrealized capital gains? (taking e.g. the last price of the year as basis)
In addition to the problem mentioned in the OP, this would also solve taxation for buybacks.
- jross225 4y agoIn addition to being a highly volatile source of revenue to the government, you would have to give tax breaks for unrealized capital losses out of fairness; which would introduce a ton of complexity.
- occamrazor 4y agoYes, tax would be paid on the net capital gain for the year. If negative, it can be carried forward to the next year, without limitations. I don’t know if offsetting non-capital income with capital losses should be allowed. My intuition says no, but who knows.
- compsciphd 4y agothe US government already effectively does this to foreign resident citizens who buy PFICs (and why us citizens are strongly encouraged not to buy PFICs). the reason its problematic is that just because a persons assets have risen, doesnt mean they want to sell, and if they dont sell, it means they need the liquid assets to cover said tax bill. a tax of this nature forces people to sell assets which is problematic. Its not problematic to say you sold X assets at profit Y, its your responsibility to retain percentage Z of that to pay the taxes.
- occamrazor 4y agoThat’s why I suggested public companies only. Their stocks can be easily sold at any time.