"The wealthy" generally structure their income to avoid it being "income", or hide it in jurisdictions the US can't see, or any of dozens to hundreds of other tricks to make sure they don't pay anything resembling their share.

This is a game as old as the US income tax itself; the 16th Amendment wasn't passed to legalize income taxes (they were already legal), but to make sure Congress could tax income "from whatever source derived", since wealthy people were restructuring their income streams to try to avoid taxation.

They still do that today.

That's an argument for changing the income tax rules, not for adding a wealth tax.

In any case, a wealth tax would be easy to game too. There is a lot of room for loopholes in the definition of wealth, what kind of wealth should be taxed, what the tax brackets should be, what kinds of deductions are allowed, etc.

We need to rebuild the Inheritance Tax. Hit the wealth at the moment of inheritance, when it acts as income for the next generation.

I'm worried about the decline of the inheritance tax. It's happening all over the West. In France, "the incomes attained by the top 1% of French inheritors are already higher than those attained by the top 1% of workers".

We could be headed back to a Jane Austen -esque society where ambitious young people seek their fortunes in marriage, rather than in business.

A lot of really wealthy people inherited their wealth, they aren't doing anything useful.

Only if they realize those gains.

Why should unrealized gains be taxed?

You can get interest-free loans against your illiquid assets. With enough income coming in to replace the spent money, it's essentially as if you're spending the illiquid assets themselves, without having had to liquidate (and thereby pay taxes on) them.

This is really more like using the illiquid assets as collateral, not like spending them. The loan payments still need to be made from income, or by liquidating assets, both of which would be taxed.

It's plain-old collateral if you're just spending the money normally, sure. But you can also take that loan and use it as leverage on a bet (i.e. a risky investment.) Then, your upside is more untaxed capital gains; while your downside can be immediately repaid by liquidating the assets, leaving you only with the need to pay the taxes.

There is a reason that investment firms exist: this process is a ratchet for making untaxed (or less-taxed) income.

But the monthly loan payments need to be made somehow, no matter what you use the loan for.

If you pay them with income, you paid income tax.

If you pay them by liquidating assets (including assets you purchased with the loan money and then sold), you pay capital gains tax (unless you sell for a loss).

In this case, I was assuming a risky investment that returns within the same month.

And then sales tax when they buy things and an estate tax when they die.