Oh boy time to nerd out over markets...

Off the top of my head this would diminish the income-producing incentive for holding stock. Things like holding to sell covered calls, holding for dividend payments, or holding to increase the credit lines you have access to would all be balanced against the new cost of holding.

If the tax is high enough we could see institutional investors dumping their shares in whatever way gives them the best tax advantages. This could lead to higher volume and higher volatility, which would probably benefit day traders and retail investors aka r/wallstreetbets. This could leads to more swingy market action, more big dips, and more violent price moves up and down.

If the market gets choppier then holding long-term assets like LEAPs becomes a bad idea. Those long term options will be worth less. Bonds and other more stable long term investments will become more desirable.

And for all the people fortunate enough to have an IRA or 401k, because god forbid we have pensions, those funds should be more actively managed going forward. You don't want to set it and forget it and you need to be careful about when you start pulling money out of those funds. Someone in their 80s is going to be on the local news broke because their MSFT in their retirement account dropped 25% on a tax swing and now they can't afford bread this week.

Yaay capitalism