The problem is not the current 23.8% (3.8% added for Obamacare in 2013), it's the proposed increase to 43.8%.
On amounts over 1m-whatever slave wage you get paid in life, correct?
What if you're not cashing out but just moving money from one investment to another? Doesn't seem as fair when you're not actually cashing out. Maybe there should be separate rates for cashing out or just shifting investments around/rebalancing your portfolio.
That's a very good point: My buying a new nano or whatever and moving my coins to it shouldn't result in a 43% hit. That does need to be corrected and is a consequence of the whole IRS decision way back when that treats bitcoins like gold bars or something.
I'm mainly concerned about the capital gains on investments you didn't cash out. A million is less than anyone needs to live in a year.
You don't pay for moving coins to a ledger anyway but not everyone will be 100% bitcoin when it goes above a million. Everyone in the US and on this forum may eventually get hit with the tax when bitcoin goes up combined with hyperinflation. Also, if the US goes to 43.8%, you can bet the EU will follow shortly. What happens when a million is equivalent to a current $100k because of inflation. Could happen in a few years at the current rate.
If you want to shift investments around, you still get hit with the tax even if you didn't take that money out to use. The effect of the tax is it forces everyone to be a holder even if they are holding a bad investment. Good for bitcoin not so good for stocks or companies. It's better for the economy if people can move their investments from shit companies to good companies as their performance fluctuates rather than be locked in due to a 43.8% hit by the government.