Policy & Market Controls
Preset Scenarios
Initial Asset Value (Stock/RE)
$1,000,000
Annual Appreciation Rate
8.0%
Crash Year (1 to 5)
Year 3
Market Crash Magnitude
-30.0%
Capital Gains Tax Rate (Realization)
25.0%
Annual Wealth Tax Rate
2.0%
The Asymmetry Dilemma: Under the US realization principle, taxes are only owed when an asset is liquidated. If governments tax unrealized annual gains like ordinary income, deep market downturns create asymmetric pressure where the state is forced to credit or refund billions for transient "paper losses."
Realized Gains Tax Total
$62,500
Levied on final transaction realization upon sale
Annual Wealth Tax Total
$104,200
Cumulative annual levy on stationary asset pool
Gov Refund & Liquidity Risk
High under annual wealth tax during crash year
Risk of paper-loss offsets or forced illiquid asset sales
Policy Asymmetry Status
Realization principle avoids government liability for paper loss refunds
Realization insulates public treasury from market fluctuations
5-Year Asset Trajectory & Cumulative Tax Extraction
Asset Valuation ($)
Realization Tax Liability
Cumul. Wealth Tax Paid
| Year | Asset Value | Annual Change | Annual Wealth Tax (2%) | Realized Tax if Sold | State Crash Exposure |
|---|