> Capital in motion and at a high velocity is generally good for everyone. Capital at rest serves very few and is very harmful to everyone else.

This is dangerously wrong. No economist would tell you that a high velocity of money is an inherent good, or even that increasing the velocity of money is an unfettered good.

Public infrastructure, mortgages, venture capital, small business loans - all of these are investments, and making it more expensive to hold capital will dry up access to money for these sorts of projects.

The lower the efficiency of a system the higher employment and the more capital is spread around, making everyone better but making it very difficult to aggregate wealth.

Public infrastructure is exactly that...public. It is isn't taxed.

More money would be available for loans with higher velocity. Venture capital already has extremely high velocity...that's why it is even possible for extreme high risk investing to be profitable in the first place.

Where the penalty would be applied to businesses, banks, investment firms sitting on CASH or near cash assets doing nothing. Put those assets to work or tax the hell out of it.

Piketty argues we need a low worldwide universal capital tax. At the very least one of the advantages would be to have a census of wealth, just like we have for income.

Note the ‘worldwide’ here - otherwise you have capital leaving the country which decides to tax it.

> No economist would tell you that a high velocity of money is an inherent good

You may be confusing money and capital. Money velocity is almost always good. If someone buys infrastructure bonds and then those proceeds are spent on contractors to build infrastructure (who in turn pay suppliers and employees) you have lots of money moving with velocity.

> You may be confusing money and capital. Money velocity is almost always good.

I am not confusing anything. Increasing the velocity of money is not always good. In fact, under some schools of thought, long-term increases in the velocity of money are neutral-to-slightly-bad.

> If someone buys infrastructure bonds

Increasing the expense of saving capital means increasing the expense of bonds, which decreases the incentive to buy them in the first place.

> you have lots of money moving with velocity.

Uh, no, the tail end of that process does describe consumption behavior, but this situation actually has very little to do with the velocity of money, since we haven't addressed the propensity to spend that money a second time within any finite timespan.

I think I'm the one that made the confusing statement to begin with.

Your clarification is more in line with what I meant.

Define "hold capital". Most capital held in banks ends up helping the velocity of money because it's used for loans. If we tax the hell out of money stored in banks, banks will have less reserve, which reduces the fraction of which they can lend, which means your average joe has less access to loans for their cars, maybe their first house, a small business, etc.

Past that, if it's expensive to hold money in America, they'll stop holding money in America, which means capital flight, which is its own very large problem worth avoiding.

Which is why I say tax ALL holdings of people operating in the US. Foreign AND domestic. A few countries already do that.

The idea is to with as much force as can be brought to bear get money to move into investments that hire people instead of just accrue capital gains.

An investment that puts people to work and generates 10% is much better than an investment in a fund that generates 10% in cap gains. Same gain, vastly different outcomes.

Because that causes capital to flow in only one direction: namely, out of the country.