Is capital gains / wealth tax a fix here though? Definitely not saying it doesn't work, I have no idea. But I'd be curious to hear both sides of the argument.
You tax the non reproducible assets like money [0] and land.
The reason is quite obvious. You can't make more land so you have to force owners to use it efficiently. Money is transactional real estate, it grants the ability to perform transactions. What people call "saving" is actually just holding onto money and blocking the capacity, it's no different than blocking a lane on the high way and building a toll booth on that lane. Money is strictly a pass-through asset. Certificate of Deposits are fine because they are contractual agreements with finite duration, liquid money has infinite duration so its corresponding debt is also of infinite duration so that needs to be taxed.
[0] No, infinitely expanding the money supply is not a solution, because it also means infinitely expanding debt.
Australia’s current federal Labor government proposed such a a scheme, but had to back pedal hard when everyone told them it ain’t gonna work.
The same federal Labor government introduced changes to capital gains tax, after promising “50 times” they wouldn’t. All the while a not insignificant fraction of MPs and Senators of said party sold significant realestate holdings before they made public their plans.
In Germany there is a "Vorabpauschale" where you pay a certain part of the capital gains tax on ETFs, certain funds even with unrealised gains. These are later accounted for when you sell. Though AFAIK if you sell at a loss you can't get the Vorabpauschale back directly, but it would increase the losses you can potentially apply against other gains. https://de.wikipedia.org/wiki/Vorabpauschale
“… These are later accounted for when you sell. Though AFAIK if you sell at a loss you can't get the Vorabpauschale back directly, but it would increase the losses you can potentially apply …”
The labor party doesn't know what it stands for anymore. The HAFF was supposed to make housing more affordable, but the housing minister said explicitly that she doesn't want house prices to decrease, rather increase at a rate slower than wage growth. But they have no plan for how to grow wages. So they are speaking out of both sides of their mouth, and the electorate will hear what they want to hear. Labor will make housing affordable for my kids in the future. Labor will protect my investment. The whole thing is a farce.
The US does this in most jurisdictions. Homeowners pay tax on the current assessed value of the property, even if that property was purchased when the property was much less valuable.
It would not be a stretch to do similar for other assets. In particular, assets held in stocks or bonds are more amenable to fractional sales than are the primary residences that we already tax this way.
No, people don't like it. They don't like paying any taxes.
