We 'don't want it' to be taxed because it doesn't make sense.
Also, you'd have to provide a tax shield for the losses as well.
There are so many things wrong with taxing on 'mark to market value'.
We can barely get away with it in real estate, but that market acts more rationally, and most of it is about rent extraction.
Not really. My car is losing 10% of its value each year but nobody is returning me the sales tax I paid for the full price. Let alone returning me some of lost value.
Why if your stock depreciates do I have to compensate you?
Can you imagine if your Tesla was deemed to have a market value of 2x what you bought it for, because a few random idiots were trying to buy it up?
And you had a gigantic tax bill on that?
Unrealized gains are not gains.
What 'someone else' is willing to pay for your property isn't necessarily very well related to how you value it.
It might possibly work for real estate in controlled conditions but even then it's risky. For equities, it's really hard to have an asset tax.
Personally I believe that your claimed cars value is speculative since you don’t mass produce and sell it widely. As a result, it makes no sense to tax you for the unrealized gains.
When you actually find a loser to buy it for the asking higher price then you should be taxed for your lottery earnings.
Some states and countries actually do tax personal property like cars. Virginia and Rhode Island, for example.
In those jurisdictions, if you have a vintage car in 2021 worth $100k, then you pay $100k * TAX_RATE in 2021. If the value of your car jumps up to $200k in 2022 (due to a movie or something), then you pay $200k * TAX_RATE in 2022. As long as the property is still in your possession, you pay property tax on it.