I work in a law firm. The way law firms are structured, everyone's income is always taxable - even the founders and owners.

OK, Al. Time to open the kimono all the way if you are going to claim stuff like this.

If real law firms are anything than the ones I've seen on TV, then when you get invited to be a partner, you must make a capital contribution to buy your partnership share. And then decades later when you leave the firm, your share is bought back from you by, essentially, the new partners coming up and replacing you.

Al, how much did a partnership share cost you in the 70s or whenever you might have become a partner?

Al, how much is that partnership share worth now. More?

Because this is PRECISELY ANALOGOUS to the "unrealized earnings" of most rich people you are talking about. They had stock (which is literally describable as "non-partnership shares" as opposed to "parnership shares" in a partnership). They got that stock when it was worth a few hundred thousand if they were founders. Years later those shares are worth millions, but that gain is untaxed because they haven't sold the shares.

And taxing them on unsold shares would actually FORCE THEM TO SELL the shares, which in some real sense, they need to keep in order to continue owning the company they have built and run for decades.

Does your own law firm experience still put you in a different situation than the others with unrealized gains?