> That's the reasoning we're applying if we tax unrealized gains on stocks (or any other asset). We take what the highest bidder is willing to pay for some tiny percentage of an asset, and assume that means everyone else could get the same price, yielding these theoretical valuations that have no bearing on reality.

We take what the highest bidder is willing to pay, as well as what the lowest seller is willing to sell for. So it's a completely fair way of fixing the value. If you think the price is too high, then why aren't other sellers rushing to sell for the same? If you think the price is too low, then why aren't other buyers rushing to buy?

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bluecalm 6 days ago | parent [-]

Because different market participants have different views, risk tolerance and needs. The market argument only works for very high liquidity public stocks. Even then it's unlikely Musk or Zuckerberg can sell their equity at the price of the day. It completely fails for smaller businesses.

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carlosjobim 5 days ago | parent [-]

The monetary (note: monetary) value of anything and everything is determined by when the minimum value which a seller accepts to sell it for is equal to the maximum value a buyer accepts to buy it for.

If you by some hacker magic know of any way to circumvent this fundamental logic, then you will become the richest man in history within less than a year, since you will then buy for less than anybody is willing to sell for and sell for more than anybody is willing to buy for.

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bluecalm 5 days ago | parent [-]

Yes but it assumes the whole thing. Just because someone is willing to buy a chunk for X doesn't mean there are enough buyers for all chunks at this price.

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carlosjobim 5 days ago | parent [-]

How can you only see one side of the transaction? Just because somebody is willing to sell a chunk for X doesn't mean there are enough sellers for all chunks at this price.

The agreed price for the last executed sale is the de facto value of anything traded. This has been a fact for hundreds of thousands of years by now.

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bluecalm 5 days ago | parent [-]

The whole point is that it isn't. Liquidity availability is big part of finance.

In your specific example of other side - yes - just because someone who needs to sell a chunk for reasons like an emergency, retirement or consumption needs doesn't mean they are happy to sell the rest of the chunks at that price.

Market based valuations only work in case of very high liquidity publicly traded assets and only if you don't own a significant %.

This makes your argument weaker, not stronger though. If there isn't liquidity market based valuation doesn't work.

>>This has been a fact for hundreds of thousands of years by now.

It isn't and never was. Liquidity was always big part of it.

	▲	carlosjobim 5 days ago \| parent [-]
		You still argue like there aren't two sides to every transaction: A buyer and a seller. You're only talking about the sellers perspective as if the buyer side is something abstract and non-human. Do you think anybody would purchase anything for more than they think it's worth because of "liquidity"?