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.
In addition to the problem mentioned in the OP, this would also solve taxation for buybacks.
I don’t know if offsetting non-capital income with capital losses should be allowed. My intuition says no, but who knows.
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.