One big reason is liquidity. Many 100MM+ net worth individuals have their fortune tied to one corporation of which they're a founder or officer. Forcing those people to liquidate pieces of their business to pay taxes on their own fortune could very directly harm the company.

Asking honestly, is "I don't have money because it's all tied up in illiquid assets" a valid excuse? That's a personal financial planning choice, is it not?

It's certainly not an excuse for failing to pay income tax. Also, using a wealth tax, tax liability could be much more reliably predicted years into the future.

They can pay in shares.

So, sooner or later we end up with all companies being owned by the government. That has been proven to end up badly (by Soviet Union and rest of the communist countries).

The government can sell the shares to the public. Or the taxed individuals can can sell shares to the public and pay the government with the money. My point is that the company's illiquid assets needn't be used to pay the tax; they can be used to back liquid assets that pay the tax.

> why tax based on the first derivative of wealth (income over time) and not wealth itself?

I strongly agree, if it could be implemented effectively. My completely uneducated guess is that it would be difficult to obtain reliable reporting of all wealth, and that income is easier to obtain information about because it involves financial transactions, often involving banks or large corporate entities.

Taxing wealth would have other advantages. For example, a wealthy person could predict their tax liability years in advance and integrate that into financial planning. Also, I think it might avoid the claimed disincentive of high income tax rates for wealthy people: Your incentive to earn is undiminished because you'll keep 90% of the money.

In the U.S., as far as I know, there is around $85 trillion in wealth and total government budgets are around $4 trillion. On that basis, the average wealth tax rate would be under 5% per year.