Tax (and other frictions) is pretty well-known as a market distortion. There is some symmetry to the taxation—both sides of the market have the same friction (tax if win, no tax if loss), so this will make it less noticeable. And in robust markets, there will be enough professional involvement (who get taxed on net winnings, not on wins ignoring losses), that the effect is probably small.
Still, thanks for pointing it out—the effects are real, and important.
Tax (and other frictions) is pretty well-known as a market distortion. There is some symmetry to the taxation—both sides of the market have the same friction (tax if win, no tax if loss), so this will make it less noticeable. And in robust markets, there will be enough professional involvement (who get taxed on net winnings, not on wins ignoring losses), that the effect is probably small.
Still, thanks for pointing it out—the effects are real, and important.
As I said epistemic status “Trivial”
This is something trivial but it’s worth noticing.