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Harris’s unrealized gains tax was to apply only to taxpayers with a net wealth of over $100 million. So it would have had no implications for a typical startup worker hoping for an eventual equity payday.

Given that you yourself mention the figure of $100 million, did you perhaps misunderstand the proposal and think that it applied to unrealized gains on any asset theoretically worth more than $100 million? The criteria proposed were not such that merely having share options in a private company with some theoretical $100 million valuation would classify you as having $100 million in wealth for the purposes of the tax.

  Harris’s unrealized gains tax was to apply only to taxpayers with a net wealth of over $100 million. So it would have had no implications for a typical startup worker hoping for an eventual equity payday.

Which is still dumb. I can incorporate a new company and give myself 100% of the shares. My friend comes along and decides he wants to give me $100,000 for only 0.01% of shares the next day. Suddenly, my company is worth $100m and now I owe the government tens of millions of dollars.

Do you not see how dumb that is? Value can be anything. I can create a $1 trillion company right now out of thin air. All I have to do is give myself 0.000000000001% of shares for $1.

Your scenario seems unrealistic at best. If you artificially inflate the valuation of your company then possibly you might pay more taxes. So, don't do that. But I don't think Harris's proposed law would have led to you paying more taxes in this weird scenario in any case, as you need to have $100m or more in assets.

It’s unrealistic but technically true. That’s a bad law.

No, it's a bad hypothetical.

No it isn’t. That’s exactly why taxing non realized gains isn’t common around the world.

As above, it is common. See: property taxes and mark to market. It is perceived as being administratively infeasible because the folks who would be paying the biggest bills want you to believe that.

I don’t think it’s technically true that your shares in your company would be worth a multiple of what someone else paid for their shares when your shares were valued as part of your overall wealth for tax purposes.

> Taxing unrealized gains in any form is pure stupidity

That's what property taxes are. Most people's largest asset is their house. So actually most people are already paying taxes on unrealized gains. It's only genuinely wealthy people, who generally have more valuable assets, that don't.

> Now you're paying a cash tax on $100m when you can't even sell anything.

It's impossible to write the law to avoid this type of situation?

> When [billionaires use their unrealized assets as collateral for borrowing] make those as realized assets and tax them

That works too! And also ban buybacks. If companies want to return profits, pay dividends.

>Fix the loophole where billionaires use their unrealized assets as collateral for borrowing. When they do, make those as realized assets and tax them. Don't apply a blanket unrealized tax.

This would require taxing people on the market value of their home pre-mortgage deduction(which is the exact same scheme as what billionaires use just on the smaller scale),which would never pass anywhere.

I am not a lawyer, but I suspect waiving the deductibility of interest expense/debt based on wealth would be blatantly unconstitutional in virtually all of EU.

A simple threshold would resolve the former (say, $10m), though I'm not even sure it's required as that isn't what a mortgage interest deduction is.