Larry K. Kotlikoff

Global Business / Economy

Taxing unrealized capital gains would change one of the basic assumptions of long-term investing: that taxes are generally triggered when an asset is sold. Supporters see the policy as a way to make extremely wealthy households contribute more fairly, while critics warn that taxing paper gains could create liquidity problems, distort investment decisions, and force sales during market downturns. The real debate is therefore less about whether wealth should be taxed and more about where, when, and how that tax should occur.