Besides wealth growth being something totally other than income, the very wealthiest people have very concentrated holdings. They want/need the associated voting power and believe in their business. So the position that accounts for basically all their wealth growth is the one they sell as little as possible.

Even besides that effect, that the dominant mechanism TFA found was ‘they don’t sell’ shows capital gains tax working as intended. Growth is reinvested to compound, which benefits everyone invested in those companies.

If the state wants to capture more wealth creation should participate in more of the risk - say by automatically buying 1% (or whatever) of every IPO conditional on the rest fully subscribing, and committing to a long (say 10+ year) lock up.

Not that there aren’t bugs to fix (step up basis), or opportunities for fraud (insufficient audit resources) , or loop holes. I’m sure they’ll find and publish plenty that won’t amount to much. But rich guys’ side bets netting -zero while they sell ~none of their primary holding isn’t shocking