Earlier quoted context omitted.
I agree with you in general, but the index fund thing is a problem. Index funds/etf pay no CG taxes even when the stocks in the index change, where traditionally a mutual fund would pay taxes as they sell the old stocks and replace with new constituents.
But you still need to sell the index fund to realize an actual gain -- there's no income generated -- right?
yes that's the point, they pay less taxes than mutual funds.