Why? Why do you all want to tax something that someone isnt actually receiving? When they start withdrawing the money, then it should be taxed, not before.The tax rate on taxable income over $44,726 starts at 22%. It is the same rate for short term capital gains. Only Long term capital gains are taxed at the discounted rate. They should be treated as income but it should be amortized over the number of years the investment was held.
The problem of taxing unrealized gains is that they can fluctuate. Some years you may make money, some years you may lose money. So, on the years that investments lose money, does that mean the government is going to issue you a check for the losses?
Also, you don’t want let them get their foot in the door on that, because, oh sure, at first they’ll tell you “we’re only going to tax the capital gains of people who’s stock portfolios are worth more than….1 million dollars”…but then over the years, they’ll find out that their new tax isn’t doing enough so they’ll come back and say “well, we have to lower that threshold to anyone who’s stock portfolios are worth…$750,000)…then $500,000, then $250,000 then “we must tax all capital gains no matter how much they are worth”…then “your house is worth $300,000? That value is an unrealized gain, so we need to have a tax on top of the taxes you already pay”
Then there are collections..let’s take art for example (could be anything). Let’s say you have an art collection worth…2 million dollars, now, you may never intend on selling that art, but it has an unrealized gain in it, so the government will say “we have to tax that”…even though it’s just art and you intend to keep it
Why is it so bad just let let investments grow tax free, and then start paying taxes when you decide to start taking it out?