> The point is that none of these guys are risking 100% of anything. Meta stock is liquid. You can sell it or hedge. You might slip 10% but it’s vanishingly unlikely to lose 100%.

All companies eventually go to zero and some of them do it without a lot of notice. How many people in the year 2000 expected Kodak to be bankrupt in a dozen years?

But that isn't even the main problem.

Suppose you own 51% of your company, i.e. a controlling interest. The company is doing very well under your leadership -- value doubles. But then you have to pay tax on the unrealized gain. The shares are your main asset so the only way to pay is to sell them. Now you no longer have a majority of the shares and control of the company moves to the soulless Wall St vampire squid which only cares how much money they can extract from your customers by any means necessary.

But it gets worse, and this time the "worse" includes for the government. You're forcing people to sell their shares in order to pay the tax, but selling shares, at scale? That lowers the stock price. Which lowers the amount of the capital gain. Which lowers the government's revenue. And the value of everybody's pension fund and 401(k).

Then it gets even worse for the government. Normally the way the stock market works is that it will go up by a little over 10% a year but then once in a while it will fall by 50% as the economy enters a recession. Right now what happens is that investors buy the stock, it goes up little by little, and when the recession hits they give back some of their gains but are still ahead of where they were when they bought the stock ten or twenty years ago. When the recession hits most of them still have an unrealized gain, so anyone who sells shares is still reporting a gain and paying taxes. Which the government desperately needs at that very moment to deal with the recession, because their other revenues will be down too. If the government taxes unrealized gains then government revenue from capital gains goes to zero when a recession hits, because basically nobody has a capital gain that year and the tax revenue from all past capital gains has already been spent. If you do this, the next time there is a recession the government is screwed.

> Say you pledge $1b as collateral on a loan. If interest rates are lower than your stock appreciation, the loan is free.

Which is exactly what the government does with unrealized capital gains. If they demand the money right now, it forces the shares to be sold, and since we're talking about something that happens at national scale, on net they'll be sold to someone outside the jurisdiction who doesn't pay US taxes. So the government gets the money now but they lose the future tax on the capital gain from the money that would have stayed invested in the stock market.

In other words, they get $100 now but that $100 in tax would have otherwise stayed invested and each year it would increase by 12%. Meanwhile the government is paying less than 4% on multi-year bonds. So tax revenue that would be collected by allowing the money to continue to be invested is by itself nearly as much as the government would pay to borrow it instead, before you account for the effects on capital gains of depressing stock prices by forcing sales.

Doing this could very realistically lower government revenue.