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Comment by FiberBundle | Hacker News Reader

I agree. Taxing unrealized capital gains is just not a good idea at all. What's more problematic than people having huge sums of unrealized book value, is that in the current system they're allowed to live a lavish lifestyle by taking out loans against those assets (which effectively is an income for them) without paying any taxes at all. That is what should be taxed in some form.

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We tax property without realizing a gain. We even tax bonds on deferred interest (eg zero coupon bonds). We can and should do this for stocks. The ultra-rich already borrow money to avoid realizing gains (and thus paying taxes). If they want to keep their stocks let them borrow to pay their tax bills.

> We tax property without realizing a gain.

Not only do we do that which dis-proportionally hurts the less wealthy more, but property taxes are assessed upon assessed valuations of which the homeowner who does not sell or gets loans upon that valuation obtains zero benefit from. So the insurance company (which also uses the valuation) and the property tax jurisdiction(s) obtain yield from the valuations that year, and do not endure a clawback when the valuations ever decline.

Property taxes are pretty bad! Everyone hates paying them, retirees can’t afford them, and they tax building improvement which motivates owners to tear down their buildings.

LVT is a much better related tax.

Anyway, wealth taxes are probably bad because taxes are supposed to be deflationary, but wealth taxes are inflationary if you collect them in USD, since taxpayers have to sell assets first. Unless the IRS is willing to take a % interest in a collectible painting as the tax.

I guess LVT is better, though I find it almost a pendantic thing at this point given that in so many places where property is expensive the property tax is effectively a land value tax already as the land dominates the assessed value so strongly.

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