alt Hacker NewsThis line of thinking though assumes it would have no impact on the largest players though. It hinges on a "calling their bluff", that high NW individuals won't change anything despite now being forced to annually liquidate assets to cover taxes. And this doesn't even touch on the immense impracticality of annually valuing assets. Or how to manage assets in illiquid markets, or how to sell 30% of a painting to cover 1% of it's mark-to-market value by year end.
The reason wealth taxes never go anywhere is because when you sit down and learn what wealth is, how it works, and what is practical, it makes the most sense by far to just tax things whenever they go back to cash.
Really the only genuine tax loop-hole is the step-up basis on inheritance. Everything else is just an elaborate deferral to pay taxes later.
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While I agree with "it's more complex than it seems", some simple things are not done because of FUD and politicians.
There are countries (ex: https://en.wikipedia.org/wiki/Taxation_in_the_Netherlands#Bo...) that do tax wealth assets (maybe not all, and maybe not perfectly) and they seem to be doing just fine.
> despite now being forced to annually liquidate assets to cover taxes
Allow paying the tax with assets. Put the assets into a black box sovereign wealth fund that's controlled by some mechanical algorithm which sells things at random as needed to fund the government budget. At scale this will be indistinguishable from a whole-economy index fund.
The best part about this is rich people can't beg off by saying "I have to liquidate stuff".
How do you pay with assets for real estate or boats or paintings? An IOU that can be cashed in when the asset is sold. Oh the boat is owned by an LLC so it never changes hands? No problem, the government has a share in the LLC too. (IANAL, IANAA so working out the loopholes is left as an exercise for the reader).
A second benefit is startup shares don't have to get hit with a capital gains tax before the startup goes public. Right now people sometimes pay taxes on shares that are eventually worth zero. Instead if this tax could be paid in startup shares, then there's no unfair tax bill.
As a condition of paying in assets, forbid the government from exercising any control over the assets. No shareholder voting, no board seats, not even choosing the paint color on the boat.
Additionally, this tax can't be on top of income tax. The whole point is to fix the worker-funded tax pyramid scheme. It has to be revenue-neutral with respect to income tax.