> Are you proposing their equity also be taxed "at rest"? How would that work?
Same way property is taxed. A taxing authority sends you a bill (based on duration of ownership), with the tax rate set by legislation. In this case, the custodian of your equity would send you your bill, with a copy sent to the IRS. I don't believe who accepts the payment needs to be defined at this time (although sending payments directly to the IRS or through your custodian are both trivial matters).
Same way property is taxed. A taxing authority sends you a bill (based on duration of ownership), with the tax rate set by legislation. In this case, the custodian of your equity would send you your bill, with a copy sent to the IRS. I don't believe who accepts the payment needs to be defined at this time (although sending payments directly to the IRS or through your custodian are both trivial matters).