Then when I heard you have to pay taxes on cap gains I thought it was just for cashing out. I
AFAIK, it's just for cashing out or for when you make a purchase which can be taxable.
The tax rules vary from country to country, but in majority you shouldn't be taxed for converting BTC to ETH or vice versa, but on capital gains at the time you "cash out" relative to when you purchased the said asset.
It's of course a bummer that many are not properly educated on how taxes work, so what was originally designed to take from the rich, is now mostly affecting the poor and middle class who are not very informed about it.
About the percentage in the U.S who haven't paid taxes on traded (capital gain), that is impossible to speculate in my opinion.