100% agree. This is more of a wealth tax than a (realized) capital gains tax.
Imagine holding a growth asset like a small tech company and its value goes up 10x before the end of the tax year, prompting a very large taxation. Then shortly after, it crashes down to 2x. You've probably lost money still.
This would have serious implications for private equity firms and other risk-takers.
Firms usually have diversified holdings and will use the event like this to write-down losses and optimise taxation for the next year.
Where this is a problem is for people with undiversified holdings, such as early employees exercising stock options. Under current system, they are on the hook for the tax bill, but if the stock crashes next year, they’d lose out and likely not having any offsetting gain where the loss could be a shield. Unlike the said firms.
Imagine holding a growth asset like a small tech company and its value goes up 10x before the end of the tax year, prompting a very large taxation. Then shortly after, it crashes down to 2x. You've probably lost money still.
This would have serious implications for private equity firms and other risk-takers.