The only way this works is if we all file asset statements, rich and poor. And that means an end to one of the last remaining forms of financial privacy - for everyone, not just the rich.
All other merits aside, is it really similar to a property tax? I pay property taxes every quarter and I have just as much property as I started with. The value of the property also doesn't go down every tax cycle as a result. With a wealth tax, the person's wealth would decrease to a minimum at some point.
So let's say you don't want to pay a wealth tax on the money in your bank account - buy a house with it. Now you're not paying a wealth tax, because it's a house instead of US dollars. Instead, you're paying a property tax! If the wealth tax is too onerous you can just park that wealth in a house or something instead, maybe rent the house out (with the help of a management company) and make money off it. That's good, right? Get the economy going, create jobs, and you get a return on your investment.
To me even if a wealth tax isn't the right solution here (I'm not convinced, and I'm not sure it's feasible to implement), the distinction between "wealth" and "taxable property" is kind of arbitrary nonsense at this point.
If everyone is taxed fairly, you can eliminate lots of means testing and systemic complexity because everyone's paying in so everyone has equal right to access all of the systems and benefits a functioning state can have to offer, whether it's health care, public transit, education, etc.
> the person's wealth would decrease to a minimum at some point.
under the Warren plan (which is pretty representative) that minimum is $50M which is still a ton of money... and taxes do decrease your held assets, sometimes this decrease may be visible on the property itself (property taxes preventing you from affording a reno you think is necessary) more likely it's visible in the form of your debt (being a bit slower to pay down a mortgage because of the loss of revenue to taxes).
So I think you may want to re-examine your statement about having just as much property as you started with, also it might help to examine the corollary related to a reduction to a minimum - that statement is technically correct, but I'd consider it meaningless at scale.
But you don't have as many assets as you started with.
Your total assets are relatively liquid, divisible assets, like cash, combined with relatively illiquid, indivisible assets, like your house.
So instead of chopping off 1% of your house every year and giving it to the government, you give them the value of 1% of your house in cash.
Honestly, the way the IRS mostly catches tax frauds is by checking self-reported income against wage expenses reported by employers, in theory we really don't need to be personally involved with tax calculations and a lot of countries (like Sweden) just tell you what they think is right and ask if they messed anything up... the only reason we don't do that in the US is because Intuit has a huge boatload of money.
As an aside, nearly all financial transactions are carefully reviewed these days under the excuse of anti-terrorism or child safety in an effort to try and detect money laundering (which, in an open system, is super hard - but becomes solvable in a closed system)... and I'm alright with that.
unless I'm mistaken on how the reporting works, this is much less intrusive than having to give the government an asset list every year.
stock ownership of the largest shareholders in public companies are public and reported several times a year.
absolutely no one should think that their stock trading activity is private - it's constantly being reported to the IRS, SEC, FINRA, whatever.
One often overlooked issue with a wealth tax is the damaging effect on financial privacy.
The income tax already has the IRS probing into nooks and crannies it has no business probing. It deputizes law-abiding businesses to snitch on each other through the obligation to report payments.
A wealth tax would ratchet the surveillance up even further. Not, not just income statements, but asset statements would be required. Enforcement would likely require reams of new compulsory snitching laws for sellers of property. It's not an outcome I think many respondents have though through much because privacy still flies well below the radar in the US.
Then there are unintended consequences. If you tax income, it re-appears as capital appreciation. If you tax assets, they will re-appear as invisible wealth. That's an outcome for which I doubt most in the country are prepared.