You pay income tax every year because you consume about that amount of resources every year and the things you want to buy aren't tax deductible. If you didn't, and you have enough money to be worth doing it, there are already a zillion tax shelters that cause taxes to be deferred until you actually want to spend the money on something.

It would reduce inequality to make that available to ordinary people rather than only the super rich, as well as encourage people to have more savings so they have more stability and aren't as impacted by a large sudden expense.

> Taxes are designed to fund the government and also address inequality. You need to be taxed more frequently to address the inequality issue.

Except that you aren't, you just keep the holdings you have already instead, and then everything is worse for everybody. The government ends up with less in the long run, so does the taxpayer, so does the new business looking for investment capital to challenge the incumbents. About the only beneficiaries are the incumbents who retain capital that wouldn't continue to be allocated to them in a more efficient market.

In theory it shouldn't have mattered if you invested in Blockbuster or Netflix because if Blockbuster was doomed then their share price should reflect that already. But in the early 2000s Blockbuster still had a higher market cap, in part because someone who invested in Blockbuster in 1989 but now thinks Netflix has more promise would have to be extra sure before making the exchange since it would cause a lot of taxes to immediately come due. So then they don't, and it becomes harder for the challenger to raise capital and easier for the zombie incumbent to waste resources in its death throes, which is inefficient.

Having the zombie company isn’t inefficient. That company is still deploying its capital to its employees and vendors, paying rent, etc. They are still contributing to the economy.

Also remember companies aren’t making money from stock trades. They already got all the money at the IPO.

It isn't intentional and it doesn't do that. Speculation can already be done with no tax consequences or profitable tax consequences when the thing you're selling to buy something else has had zero or negative value appreciation, and can also be done by borrowing money to speculate with and using the shares you can't sell as collateral for the loan. But that too is less efficient because, although the speculation is happening, now there are a bunch of wasteful transaction costs.

Also, long-term investors shouldn't care about short-term value swings, and short-term investors get what they paid for.

> Having the zombie company isn’t inefficient. That company is still deploying its capital to its employees and vendors, paying rent, etc. They are still contributing to the economy.

When one company is paying people to build technology to reduce carbon emissions and the other is paying people to dig holes and fill them back in for no reason or rearrange the deck chairs on a sinking ship, diverting capital to the second company is most certainly inefficient.

> Also remember companies aren’t making money from stock trades. They already got all the money at the IPO.

The IPO for some companies hasn't happened yet. Moreover, existing companies can sell new shares, and the company's market value is used to assuage creditors and allow existing companies to borrow at lower rates because the creditors know the company could pay the debt by issuing new shares if necessary.

Yes, it is. If the price drops, it becomes that much more feasible for an outsider to rescue it with a takeover bid - either way, the company will surely be viable as a going concern. You don't seem to be making a consistent argument here.

Obvious counterexamples to your logic: ETFs using heartbeats and foreign buyers can buy and sell without tax consequences in the US.