But as I pointed out in my other comment, those returns are already taxed. If you think those returns are excessive, the solution is to raise the tax on them, not introduce an entirely different type of tax, with plenty of collateral damage.
Exactly, that's also what I try to point out to people: there are already tax mechanisms in place. Just raise tax rates if that's the goal.
It seems to me with a wealth tax they just want to force everyone to work & spend forever, except for the ultra rich who can afford it and who have the means to hide most of their capital offshore. It would be a devastating blow to the FIRE movement, where normal people have the goal the accumulate enough resources & invest them wisely so they and their family can "retire" early.
And the more you save, the more the returns on your money are. Wealth grows much faster than the tax.
If you have over $50 million (which is the target of this tax), or even if you have $5 million, you're not putting this in a savings account. Even just sticking it in an index fund and forgetting about it generates 8%, and has done so for decades.