As a Norwegian startup founder I've unfortunately spent a lot of time thinking about, dealing with, and debating unrealized capital gains taxes. Here are some key points worth noting: A wealth tax is an implicit form of confiscation. While practically all other taxes are based on taking a cut of a voluntary exchange, a wealth tax is a transaction forced by the state. In practice, there are only two ways to pay it: taking out a very high salary or dividends, or selling shares. For private tech companies, this is usually neither feasible nor desirable. In either case, every $1 of wealth tax paid reduces the company’s value by $1—meaning the state has de facto confiscated private property. In fact, it takes out even more than the $1: You also pay taxes in order to pay taxes. Income, dividend, or capital gains taxes must be paid to extract the cash needed to pay the wealth tax. As a result, the true effective tax burden is significantly higher than the stated rate. The value of any asset can change quickly. Wealth taxes are set at an arbitrary point in time. An asset can drop 90% between the wealth valuation date and when the bill is due. It is deeply unfair to pay an actual tax bill based on values that does not exist anymore. Furthermore: It is impossible to know the true value of an asset that is not transacting. This creates substantial uncertainty for taxpayers and high administrative overhead for governments attempting to assess values. Preferred versus common shares, vesting schedules, transaction size, and whether a founder or a small minority shareholder is selling can all lead to vastly different prices for what appears to an ignorant observer to be the “same” shares. The only sensible solution to these problems is to tax voluntary transactions in the economy. Those who lean left may prefer higher marginal rates, while those who lean right may prefer lower ones—and that is a legitimate political debate. High tax rates can be fine; taxing unrealized values can't.