Reply #37: allow me to clarify ...

[welshTerrier2]

you said "The income should only be taxed when it is actually relialized and not recognized" ...

just to be clear, i'm not talking about taxing income regarding this investment ... i'm talking about taxing the asset whether it makes a gain in the future or it doesn't ... could the investment eventually become worth much less due to an "economic bubble" ... of course it could ... and then you would have fewer assets and pay a lower tax ...

think of my little system like this ... the government, rightly or wrongly, decides they need to raise a certain amount of money to do a bunch of really important stuff ... what's the right way to tax the citizens?

take a somewhat overstated example to clarify the objectives i'm seeking ... say you only have two citizens in your imaginary country ... one citizen earns $50K and the other citizen earns zero ... but the zero earner owns 10 billion shares of a high quality stock ... in my world, the zero earner has far more "ability to pay" than the $50K guy ... so, i go to the zero earner guy and i say "look, you can afford to pay more taxes than the other guy" ... income, and whether the zero earner actually sells any of his stock for a gain is not the issue ... he has massive wealth and a much greater "ability to pay" ... the $50K guy would be expected to contribute to the country's priorities to a lesser degree ...

now, to your point about taxing the income of the stock transaction when a gain is "actually realized", that's fine ... now you're talking about how to tax income ... i have no problem with hybrid systems that seek a relationship between taxing income and taxing wealth ... it should enable us to drastically lower tax rates on income ... the goal here is not to collect more taxes ... so, on the sale of stock, if a gain is realized, only then would the proceeds be subject to INCOME TAX ... but the asset itself, prior to any sale, would be included in the net worth calculation ...

is that clearer?