alt Hacker Newsthis a million times. Land easy, already being taxed. Any regulated financial instrument, also easy, take the minimum average yearly price of held assets. Tricky things like privately held companies, maybe we solve that one later, but even then there are valuations made at various points, anchor to those, be conservative in every case. If the gov primarily exists to enforce property rights... then people should pay in proportion to the rights that are being enforced on their behalf.
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> Tricky things like privately held companies, maybe we solve that one later
So I spend 30 minutes to set up an LLC and then transfer my assets to that LLC. Now, I don't hold the assets; I hold a stake in a privately-held company.
Ultimately, the solution you come up with needs to be at least somewhat airtight; otherwise, it just penalizes people who spend less money on tax advisors. The generation of income is a fairly well-defined point where assets change hands and you can apply some quasi-clear rules. Ongoing taxes on the potential to make money are a lot harder. So I buy some gold bars or valuable paintings and stash them in the attic. Gold / Picasso appreciates. How do you tax me on that? Do I submit an inventory of everything I own to the government every year? How does the government check - do they get to rifle through my stuff every December?
And hey, here's a cool one: if my parent owns a company and puts it in their will that it's mine when they die, is that promise an asset I owe taxes on every year? It's clearly worth something: it's potential money down the line.
We already value private companies with a 409a valuation.
If you properly taxed real estate in a progressive way, you wouldn't have to bother with taxing paper wealth at all---the collective value of paper is already reflected in the price of land. People with large paper fortunes inevitably buy real estate, and when they do, their paper wealth inflates the price. This is why median residential housing prices have dramatically outpaced median wage increases, along with anything else tied to real estate, like sports and concert tickets.