That's capital gains, which we currently recognize on realization events (selling the asset or trading it). With current capital gains, if you sold in 2025 you'd pay the taxes on 40k at ~15% (depending) so 6k. If you repurchased it at $100k and then sold at $60k, you can claim the losses.

People advocating for a wealth tax aren't pushing for a tax on gains and losses but rather the total asset value. I've seen 1% and 2% bandied about.

So in 2024, you'd pay $1.2k in taxes (at 2%). In 2025, you'd pay $2k. And in 2026 you'd pay $1.2k

Though, usually, there's also a minimum wealth paired with the tax. Again, I usually only see it for things like individuals with over $100M in assets.

For options, it'd still be the same thing. If the strike price is $1 and the actual price is $60 and the option is vested then you'd be taxed on the $59 per option you hold.

This only gets difficult if you are talking about options in a privately held company. But, again, that's not really the case for a lot of the most wealthy who the wealth tax is targeting.

>You buy 1 BTC at $60k in 2024. In 2025 it’s valued at $100k, so you pay taxes on $40k gain.

Right, and at this point in the argument it’s also worth asking ”pay taxes with what?” which also quickly makes the idea of taxing valuations obviously absurd.

It would force any value creator to sell his creation, which basically destroys the mechanism from which all welfare for anyone in our societies currently originates.

In Canada you can carry back capital losses up to (I think) 3 years. Of course you lose the time-value of that loss. Can carry forward losses too.

Similar things happen with (on the way to) "bankrupt" corporations that have large tax losses that can be applied to future profits.

A wealth tax would be like 5% of the $100k, nothing to do with the gains.