Switzerland taxes wealth instead of capital gains (except for professional investors).

In some ways taxing wealth is quite simple, because wealth is already meticulously recorded via contracts and owners go out of their way to estimate the magnitude of their wealth for example to borrow money or for other financial and economic obligations.

Another approach would be to tax capital gains at the same rate as income and introduce additional top brackets. I have a hard time to find a good faith reason for capital gains to be taxed less than labor.

> Taxing wealth is much harder on a practical and algorithmic level than taxing income.

I find this argument somewhat unconvincing. Where is most of the wealth? In hard assets, such as real estate and financial assets, such as stocks and bonds. The former are very difficult to hide, for obvious reasons. As for the latter, the ownership of every single share is recorded in large databases (e.g. DTCC, Clearstream and Euroclear). In that sense, the "physical location" of most of the wealth is well known, so in theory it should really not be difficult to tax it.

I need to think about this more, but the first thing that comes to my mind is not that this looks like “taxing the tool”, but that this can (ought to?) be similar to an alcohol or a fuel duty.

Nobody calls alcohol duty “micromanagement”.

For products like petrol, it’s widely known that from money paid for a liter when it’s sold, say, in the UK, more money stays in the UK’s government pocket via a complex web of taxes and duties, than profits the oil production company that supplied crude oil for that petrol.

Maybe taxing a kWh of the AI data center energy consumption should be a thing? I don’t know.

> Taxing wealth is much harder on a practical and algorithmic level than taxing income.

Depends on the tax. It is a lot easier to move move profits to a low tax jurisdiction than it is to move land or machinery.

> But either way, taxing the tool is micromanaging the problem, and some powerful people cynically promote that because they can aim the details away from themselves.

I definitely agree with that.

There are all sorts of problems. Do you tax this notional "income" where the work is done or where the AI runs or where the company that owns it is incorporated?

I think the simplest explanation is also the best one. Like you said, it is very difficult to tax wealth.

I think we have no option other than taxing loans and other money movements like that in sufficiently large scale as ordinary income. If I get a loan for USD 200k for a house once a year, I think it isn't income but if ElMo gets loans worth USD 20M a year, every year, he should pay income tax on all of that as if it was ordinary income. How he pays it? I don't care. Sell some assets. Oh and that sale is also taxable.

Raising money through taxing wealth is far easier than raising money through taxing income when nobody has jobs.