Because you are a person and a business is not.

If I buy a house for 100$ then that house is now worth 100$, as that transaction set the market value at the time of purchase. 5 years later an assessor from the AHJ comes by and informs me it’s worth 150$ because “market”. My property tax burden has now increased as its percentage based on the market value of the house. I now owe higher taxes on unrealized gains.

If it works in property why not stocks? Is it the risk that makes the difference?

The risk the American tax payer has been forced to burden since we’ve bailed major institutions out of insolvency since 2008 (and before).

We are/have been allowing the ultra wealthy to create a system where they mitigate all their personal financial risk and then the people philosophize why it would be “unfair” to level the playing field. I don’t get it.

Yes, it might appear silly in the above hypothetical to be taxed on the same dollar 5 times but that isn’t the discussion. We are talking about a one time set rate tax on billionaire assets because it’s obvious that this game is rigged and something needs to be done.

Unfortunate, this didn’t pass as it might have been a proof of concept for the rest of the nation.

If you are given a stock worth $1 you pay tax on that amount and it is treated is income. Agreed.

If the stock becomes $2 do you owe? No. Unrealized gains. That stock could do anything.

If you trade your $2 stock for a $2 Bill, you owe tax on the $1 gain. We are still tracking.

If you use your stock as collateral for a $1 loan, you already paid taxes for the "income" of $1. I could see arguing that you are "clear". I would do it like this: when you borrow against stock, I would say that the principle "value" of the loan be taxed as though you had sold the stock which is functioning as principle. So if your $1 stock is now worth $10 and you use $3 to borrow $5 (somehow, let's just assume it's not 1:1) I say you owe tax on $3 - $1 = $2. When that loan is done, if you want to do it again, you don't owe again with that batch of stock. If you take another loan same time, same terms, you also owe tax on $3 more, since you are doing $6 worth of "work".

This is still a little unsatisfactory to me, but it seems like the most fair. Either the money is usable, and therefore taxable, or it isn't.

Edit: and of course your brokerage now marks your cost basis for those stocks accordingly because it has been "realized". If you then sell those stocks for that value you're all set or if you gain or lose you could have losses or gains respectively for tax purposes. This is still wildly good because you can use the money without selling stocks.

Edit 2: The more I think about this, the more I think you should just be taxed every time on every dollar of stock you leverage. If you want to use it, divest.