Perhaps I don’t perceive how the supposed plan is meant to work. There isn’t a tax credit score for unrealized capital losses, proper? So that you received’t need to maintain unstable asset courses any extra, proper? Think about the worth going up, you pay some tax, after which the worth falls and you progress into loss territory. You continue to paid the tax! You get nothing again. By precisely how a lot do the costs of those property need to fall, ex ante, in order that holding them is a good suggestion within the first place? Or possibly the rich buyers topic to this tax are usually not vital sufficient to on their very own transfer market costs, by which instances they’re simply pushed out of those very danger asset courses?
Should you can deduct unrealized losses, simply how a lot income will the invoice elevate? May the rich be incentized to carry ever but riskier property in that case? And the way will debt property be handled? What precisely is fairness anyway? Do all choices and derivatives positions need to be thought of as nicely? (If not there’s a huge arbitrage alternative, maintain some property with an enormous likelihood to take losses however hedge your place with derivatives.)
Has anybody estimated all this and figured it out? Ought to we go such a tax invoice with out such estimates and public debate? Isn’t that sort of democracy “good”? What would The Social gathering of Science say?
What am I lacking right here?