Honestly it's time to eliminate the whole concept of "realization". Even secondary-market shares are liquid enough to value reasonably reliably, or we could bring back in-kind taxation.
Are you asserting that everyone who has held assets long-term is "swimming with the sharks" and thus deserves to have sudden unexpected taxes applied to their historical investments?
> Honestly it's time to eliminate the whole concept of "realization". Even secondary-market shares are liquid enough to value reasonably reliably, or we could bring back in-kind taxation.
You'd have to figure out how to deal with illiquid assets. If property values in my neighborhood go up will I be forced to sell or refinance my house to pay the tax bill? If I manage to pay the taxes while holding on to the house, and later the value goes back down, and I don't have other gains to offset, do I get a refund?
Pardon my ignorance, but isn’t that how it works (outside of California)? My understanding is that in almost all US tax districts, property values are assessed periodically and the tax liability of the owner changes year on year with the value of the property.
If they're legitimately long term investments then "sudden unexpected" taxes shouldn't be a problem. And it's not like these people accidentally stumbled into a 100% tax break. They knew what they were doing.
> You'd have to figure out how to deal with illiquid assets. If property values in my neighborhood go up will I be forced to sell or refinance my house to pay the tax bill?
No-one cares whether my generation can afford to own our homes, why should I care whether boomers can afford to own theirs? Maybe if we stopped deferring taxes at the drop of a hat it would bring some sanity to house prices.
The 100% tax break is for QSBS specifically, but it seems like you're saying all capital gains should be taxed annually rather than at realization, including regular retail investors, people who own houses, etc.
> If they're legitimately long term investments then "sudden unexpected" taxes shouldn't be a problem.
Sometimes people make financial plans based on what they believe their assets to be worth, e.g. deciding when to retire. Certainly people shouldn't be making big life decisions based on short-term gains but doing so based on long-term gains created over decades seem entirely reasonable. Finding out that those long-term gains are now worth 5% less (because the tax rate went up 5%) could be frustrating.
