Let's say you invest 100k in Bitcoin and 10 years later it's 1M. In a capital gains system you would pay 252000 EUR in taxes on that (assuming 28% capital gains tax, which at least 1 country in Europe actually has).
In the capital tax system you would have paid between 15.000 and 100.000 EUR of taxes on that over the same 10 years. Which is... much less.
So you could argue that the tax on capital is much more "fair". It's definitely MUCH simpler in terms of administration, because you never ever have to prove the cost-basis of your investment. All you need to know is your current P&L. There are a lot of US brokers out there who deliberately "forget" to provide a cost basis when you buy shares (hello and fu DriveWealth).
> In the capital tax system you would have paid between 15.000 and 100.000 EUR of taxes on that over the same 10 years. Which is... much less.
Unless bitcoin crashes to zero. Then you've not only lost the $100K you spent to buy the bitcoin. You've also paid these taxes just because you possessed this now-worthless asset.
This is why capital taxes suck: you haven't actually made any money until you sell the asset. You can easily end up paying taxes on something that has zero value.
Let's say you invest 100k in Bitcoin and 10 years later it's 1M. In a capital gains system you would pay 252000 EUR in taxes on that (assuming 28% capital gains tax, which at least 1 country in Europe actually has).
In the capital tax system you would have paid between 15.000 and 100.000 EUR of taxes on that over the same 10 years. Which is... much less.
So you could argue that the tax on capital is much more "fair". It's definitely MUCH simpler in terms of administration, because you never ever have to prove the cost-basis of your investment. All you need to know is your current P&L. There are a lot of US brokers out there who deliberately "forget" to provide a cost basis when you buy shares (hello and fu DriveWealth).