Raise Capital Gains Tax Rates if You Want Fairness in the System

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29. you wanna really burn them? make them mark-to-market at the end of each year!

right now, capital gains are taxed only when the transaction is closed.

if you bought microsoft when it went ipo in 1986, and have been continuously holding those shares, you've only paid taxes on the dividends. the shares themselves represent an enormous gain, but you don't pay taxes until you sell.

this seems reasonable enough for capital investments that are difficult to value from year to year, such as specific works of art, or many private companies. but if there's a public market for equity that gives you a value every millisecond, it seems silly not to use that information.

the only wrinkle i'd add is that right now, capital losses can only offset ordinary income up to $3,000. i'd eliminate that so people come out whole if they gain big one year but lose it the next (or vice versa).