Holding an asset does not result in a capital gain. The Tax the Billionaires bill wants to tax holding an asset that has appreciated in value. Not only that, but they use a handpicked time boundary that from the bottom of the market crash to calculate a windfall tax.
Lets say you owned 1 BTC since the inception ($0 cost basis) and held it until today. The value of 1 BTC has fluctuated the entire time, but you've only ever owned 1BTC.
Here are a couple lows/highs during the period:
Dec 2018 - $3500
Jun 2019 - $12000
$8500 gain (on paper)
March 2020 - $5500
Aug 2020 - $12000
$6500 gain (on paper)
To use the Bernie Sanders standard of 60% windfall gains, you'd owe $5100 from the 2018 crash and recovery. If these types of windfall taxes become a common thing, you'd owe an additional $3,900 from the 2020 crash and recovery. So you'd have paid $9,000 to hold your 1BTC.
If you sell your 1BTC today, you'd get $10,000. With your $0 cost basis, the entire $10,000 is a capital gain. Lets say your long term capital gains rate is 15%, you'd owe $1,500 in taxes when you sell it.
So for investing in 1 BTC, you'd have $8500 in your bank account, and would have paid $10,500 to hold it.
1) Is BTC more volatile than Amazon stock: Yes
2) Does that amplify the numbers in my example: Yes
3) Is wealth inequality a giant problem in the country: Yes
4) Will I shed tears if Jeff Bezos gets a giant tax bill in the mail: No
However, I think it does demonstrate the problem with taxing the change in value of an asset, vs your capital gain from when you sell it.
Statements by journalists like this and actions like Bernie Sander's Make Billionaires Pay Act shows that either 1) a number of people have no understanding of how asset prices work or 2) they understand the underlying economics, and would rather stir up anger to implement their agenda than be honest.
An example I've been giving to people who are making the argument about billionaires making money during the pandemic is: Imagine you own a modest $300,000 house. A city inspector comes by and finds that your property is located on an old toxic waste spill and condemns it so that it is now worthless. A week later, the city finds that they've made an error, and there is no toxic waste, so now your house goes back to being worth $300,000. A month after that, you get a tax bill in your mailbox for $100,000, 30% of your $300,000 asset gain.
I've read all of Gibson's books, but I found Agency hard to finish.
The book has two parallel story-lines, and very short chapters which makes it a very disjointed read.
The characters were also very flat. For the last quarter of the book, the main character's dialog is almost all short questions and other characters explaining things to her. e.g.
Lets say you owned 1 BTC since the inception ($0 cost basis) and held it until today. The value of 1 BTC has fluctuated the entire time, but you've only ever owned 1BTC.
Here are a couple lows/highs during the period: Dec 2018 - $3500 Jun 2019 - $12000 $8500 gain (on paper)
March 2020 - $5500 Aug 2020 - $12000 $6500 gain (on paper)
To use the Bernie Sanders standard of 60% windfall gains, you'd owe $5100 from the 2018 crash and recovery. If these types of windfall taxes become a common thing, you'd owe an additional $3,900 from the 2020 crash and recovery. So you'd have paid $9,000 to hold your 1BTC.
If you sell your 1BTC today, you'd get $10,000. With your $0 cost basis, the entire $10,000 is a capital gain. Lets say your long term capital gains rate is 15%, you'd owe $1,500 in taxes when you sell it.
So for investing in 1 BTC, you'd have $8500 in your bank account, and would have paid $10,500 to hold it.
1) Is BTC more volatile than Amazon stock: Yes 2) Does that amplify the numbers in my example: Yes 3) Is wealth inequality a giant problem in the country: Yes 4) Will I shed tears if Jeff Bezos gets a giant tax bill in the mail: No
However, I think it does demonstrate the problem with taxing the change in value of an asset, vs your capital gain from when you sell it.