zlacker

There's a gradient of risk, though. Suppose someone is sitting on 5 billion dollars unrealized gains by holding the index fund VT. The idea of "risking 100% loss" in VT is ludicrous.

Maybe unrealized gains tax can be formulated as "cushy gains tax" if riskiness can be quantified in a reasonable way based on an asset's age and metrics over time. Then if an asset's risk score is above X, you don't pay tax. If it drops below X, you start to pay tax.

This would probably lead to more innovation and fewer monopolies, as people are incentivized to invest in riskier companies, and companies are incentivized to self cannibalize to maintain a healthy risk score.