Comment by akomtu

In its currently proposed form, a 40% tax on gains at the moment of sale, is effectively a tax on middle class. Those with a million in a brokerage account, i.e. the solid middle class, usually have to sell most of that when buying a house, and so they'll have to pay 40% on their entire gains. In practice, this tax will take back the gains from the last year's bull run of the stock market. If the new tax stays for long time, it'll effectively reduce the sp500 gains from 10% minus inflation to 10% minus 4% minus inflation, so about 3% per year at most. The rich, on the other hand, have 100M in stocks, but they need to sell only 250K per year or 0.25% of their assets and pay 40% only on that miniscule amount, while the 20M gains from the last year will keep sitting tax free. If the WH created an annual capital gains tax regardless of whether assets have been sold, that would tax the rich to the full extent and those rich would be furious and would do anything to change the US administration at the next elections.