Any attempt to tax unrealized gains is going to lead to black markets and KYC-avoidant crypto transactions faster than you can say "capital flight".
Even black markets won't save you from this. Every piece of private property you own will create "unrealized capital gains" during a high inflationary period. Cars, tools, building materials, and even food that can be stored for a while. Even a pure bread dog could generate unrealized capital gains. Suppose you bought computer parts and assembled it yourself, would that result in unrealized capital gains since people sell assembled gaming computers for more than the sum of their parts online? What about if you and two buddies replace the roof on your house? A new roof ads to the value of your house. Could home cooking be taxed? Surely a cooked lasagna is worth more than the sum of its ingredients. That's only a few bucks, but if you cook three meals a day every day all then sudden you have $5000+ of unrealized gains per year.
Future speak: "two dozen eggs for a pint of moonshine"
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