Capital gains aren't theoretical. A capital gains tax is levied when gains are realized by selling an asset. (e.g. I receive a dividend on a stock, or I sell a

Capital gains aren't theoretical. A capital gains tax is levied when gains are realized by selling an asset. (e.g. I receive a dividend on a stock, or I sell a stock or my house for more than I paid for it.) I think you're confusing a capital gains tax with a wealth or asset tax.