If there is any unfairness, it would be forcing Mr. Savvy to pay taxes now in real dollars today for abstract future gains that may or may not be realized. Until that boat is in his Driveway. Mr Savvy should not be taxed on the potential of him buying it.

Nice, I like it. Just had carpal tunnel surgery, so this is one handed. Just prior to the Civil War, this unfairness was discussed under the term the Rentier class. People who did no work and made their money from renting, interest, and appreciation on assets. Modernly they are a huge lobby and have managed to convince people it would be very unfair to tax them on unrealized gains.

Conversely, they also manage to convince people capital gains should be taxed at a lower rate because if they had been paying taxes all along, it would be at a cheaper rate. As a young man, when I asked, that was the explanation for the cheaper capital gains rates. :)

These are the same people who pay inheritance lawyers a lot of money to figure out how to encumber their businesses and property so that the least amount of inheritance tax is paid.

The point is that never paying taxes, or paying a mere pittance on unrealized gain even if there are transactions is very real and goes on every day. This happens to our detriment. The ability of the wealthy to self deal by influencing law is far greater than our ability to hinder it.