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Comment by ivankra | Hacker News Reader

Looks like they're coining a new legal term "Capital Growth Tax", under which they are going to tax unrealized capital gains. I'm not aware of any other country that taxes them like that (besides wealth/exit taxes), so maybe they're the world's first here!

Some countries have wealth taxes - but they are usually flat or scale with wealth, not the yearly increase in wealth. Note that currently NL does de facto have a wealth tax in Box 3 system - shares are presumed to have a fictional fixed yield of around 5-6% per year on which they charge you income tax, so it works out to about 2% wealth tax.

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> I'm not aware of any other country that taxes them like that (besides wealth/exit taxes), so maybe they're the world's first here!

Real estate taxes.

> not the yearly increase in wealth.

Real estate taxes.

For real estate, yes, but it's a quite different type of asset with a stable value that (mostly) only goes up.

What about stocks or crypto (the assets this new law targets)? They can have wild value fluctuations in a year. If your crypto or startup's options have +1M paper gain this year and turn worthless the next year, is it fair to ask people to cough up some 300-500k of real cash in tax?

Maybe? You can deduct losses. If you have to sell a little of your crypto while the price is high to pay your taxes, then what have you lost after it goes to zero? At least the tax office get something out of it in tat case.

Yes, and we absolutely should.

> For real estate, yes, but it's a quite different type of asset with a stable value that (mostly) only goes up.

It's still a tax on wealth. So you just can't use this argument (the argument that we dont tax anything based on wealth and therefore is justification not to do it now).

> is it fair to ask people to cough up some 300-500k of real cash in tax?

I actually disagree that we should tax anything on asset value. Yes, RE is illiquid and thus has "stable" values. What's worse is that the value is tied to appraised values (and potentially government imposed caps) which you have no (or limited) control over.

Not really, property taxes in the U.S. are revenue-driven (sometimes called “budget-driven”), not rate-driven. The taxing authority adds up how much money it needs, then apportions it based on property values.

Huh? You're talking about budgeted values for the payee, not the rate that an individual payer. I'm talking about the rate established for the payer, which is based on the value of your property. In absolute value terms I may pay more than my next door neighbor if my property is deemed to have a higher asset value. This would be no different if both my neighbor and I owned AAPL stock, but if I held more stock than him, I would owe more (theoretically) in taxes on that stock.

I think there are some other jurisdictions that require Mark to Market for tax purposes, at least in some situations.

In the US, certain traders can elect to mark to market [1].

[1] https://www.irs.gov/taxtopics/tc429

> I'm not aware of any other country that taxes them like

My home's property taxes operate this way. The county calculates the current value of my home and charges me a % of that in taxes every year.

Germany is also already taxing unrealized capital gains of funds (Vorabpauschale).

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