Remember that the income tax was originally targeted at the very rich. Once we allow out government to tax unrealized gains, they will just keep moving the threshold down until middle class people are paying taxes on accumulated assets. That is the only way they will get to the amount of money that they want to spend.
Think of your house… if the value goes up by $50k over 10 years, you will have to pay taxes on that $50k even though you don’t sell the house. Oh, and you will also pay the capital gains tax when you do sell it.
Currently, wealthy Americans do not have to pay taxes on vast accumulations of wealth because they are taxed only once an asset is sold. Billionaires often borrow against their non-taxed assets, allowing them to spend enormous sums of money while effectively paying very low taxes relative to their income and worth.
Under the “Billionaire Income Tax” proposal, a summary of which was obtained by The Washington Post, the federal government would require billionaires to pay taxes on the increased value of assets such as stocks on an annual basis, regardless of whether they sell those assets. Billionaires would also be able to take deductions for any annual loss in value of those assets.
The plan would also set up a system for taxing assets that are not easily tradable, such as real estate. The tax would apply to billionaires and people earning more than $100 million in income three years in a row.