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by doubleunplussed
1837 days ago
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Dollars only have hypothetical value until spent as well, but we still tax them. I'm not super rich but if the government wanted to tax my shares, I'd pay the tax out of my income instead of buying more shares. I could probably pay a decent chunk of it out of dividends too, if I wasn't reinventing them. Property tax here in Australia is based on hypothetical value, the sky doesn't fall. Even if people have to sell some shares, I just don't care, it's not a big deal. Sell em. |
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The problem with the oft-cited options example is that tax is levied on gain of an asset that in fact cannot be legally sold at the time the tax is levied and is often enough worthless (or worth a lot less than at tax time) by the time it _can_ be legally sold.
Asset-based taxation on liquid assets with deep markets and clear prices is indeed probably fine in various ways. But if you tax other sorts of assets there are various problems, and if you only tax the easily-taxable ones people will turn to the other ones to avoid taxation...