BusinessSep 23, 2026

Should unrealized capital gains be taxed?

One AGAINST case in this debate

I have watched every tax-only-the-rich promise of my lifetime eventually knock on the middle class door, and this one has the same knock built in. The 16th Amendment allows taxes on income, and the Supreme Court in Moore v. United States (2024) upheld a tax on already-realized foreign earnings while pointedly leaving the bigger question undecided, which means a tax on gains nobody has received is on shaky constitutional ground. Even if it survives for billionaires today, the machinery it builds, annual federal valuation of everything you own, is ready-made for the next revenue hunt. My 401(k) holds unrealized gains too, and I am not comforted by promises that the line will never move. Lines drawn for revenue always move.

2 comments

Discussion (2)

@darren.moonNeutral1 month ago

The constitutional question is genuinely unresolved, and Moore deliberately left it open. I am sympathetic to the fairness argument, but building a major revenue program on a tax the Court might strike down is risky legislating. Congress should get a clearer ruling before betting the budget on it.

@freya.jeffersonAgainst1 month ago

Courts do not strike down taxes because they are novel; they strike them down when they violate the text. A minimum tax on economic income has survived every serious challenge so far, and waiting for perfect legal certainty means waiting forever. The Court had its chance in Moore and blinked.