(not sure why the downvotes, I just upvoted you - this is a solid question)

I suppose because property values are considered to be more stable than, say, GameStock puts. But you raise a good point, that what we're talking about (really) is a "how we should tax _wealth_" vs "how should we tax _capital gains_".

I feel like "capital gains" occupy a strange middle-ground between income and wealth.

Capital gains clearly represent a change in your wealth, and are somewhat "income-like". But they also are a persistent thing that you are in control of until the time of sale, and are somewhat "property-like".

It seems plausible that we could come up with a reasonable-scheme for capital gains taxes that manages to accommodate both properties, but I think it'd take a fair amount of consideration to make sure that there aren't nasty edge cases, and the benefits outweigh the additional accounting.

Capital gains aren't a strange middle ground. They are the best attempt to have an income system work: they allow the taxation of income from money. A system that taxes only income from labour is grossly unfair to the poor. A system that taxes all wealth is overly bureaucratic and deeply invasive.

I'm against wealth taxes, but you make a good point.

You may have just solidified my opinion against property taxes :)

Seriously, evaluating and setting values for property takes a lot of resources at the city/county level... it would take a massive increase to properly evaluate wealth for taxation, because so much of it is completely intangible and abstract.