Great, but there are many more mid-six-figure earners who don't have >$10M in household net worth. And if you tax mid-six-figure earners, you get them, too. If you want to target wealth over $10M, tax wealth over $10M.

IMO, the strategy is to tax the net worth itself. Salaries are sufficiently taxed. It's almost disingenuous, at this point, to think of salary taxes as indistinct from income taxes broadly. With a salary, people actually pay the tax rate.

Are you excluding primary residence? A lot of paper millionaires due to lucky real estate

I'd prefer it excludes nothing. No matter what the rules are, they will be unfair or harsh on some people in some circumstances. This is true of every kind of tax. It's true of simple rulesets, and complex ones. It's certainly true of the current de facto ruleset around capital gains and corporate income taxes.

$10m is a substantial bound. Above that threshold, we can expect financial fortitude.

How many not-otherwise-rich people have primary residences worth $10 million? I'm going to guess "not very many".

> paper millionaires

Is there some other kind of millionaire?

I'd imagine in this case it's more a matter of liquidity.

It's one thing to say you have a million dollars to your name. The difference is that one person has to sell everything they own to command that value while someone else just calls their broker to have it liquidated from their rainy day fund.

Indeed, and in 2021 I think it’s pretty clear that owning a residence means you have a reasonably liquid asset.

But more to the actual point. To the extent a concept of “paper wealth” exists it should be confined to things that are genuinely unable to be converted into real money at all. For example stock options in a seed stage company are genuinely illiquid and may never be worth anything ever to anyone.

People living in a million dollar house and saying it’s not really wealth and shouldn’t count sound pretty out of touch to the rest of the world that doesn’t get to live in a million dollar house.

The whole concept of paper wealth is literally around what you could hypothetically have, though. That's the whole point.

https://en.wikipedia.org/wiki/Paper_wealth

If you're sitting in a house and it has appreciated in value because it's 2005 and you are in Sunnyvale then you've acquired paper wealth. You didn't upgrade your home, you didn't make it nicer. It's the same home you bought for $300k. It's just now magically worth $1.2m because the world continued spinning.

Sure, that probably sounds great if the person wanted to sell the home and move into a place where home values have remained largely unchanged. But if that person either likes where they live or wants to stay reasonably close, the increased value of their home basically doesn't affect their life - they purchased something that was of modest wealth and now people think it's worth more.

If you bought a gumball for $0.25 and now people think it's worth $1m should you get taxed as a millionaire even if you never intend to sell it? Would it seem reasonable that the rest of the world thinks that you're out of touch because they don't get to have million dollar gumballs?

> the increased value of their home basically doesn't affect their life

Yes it does. They don’t have to move. The people who aren’t rich and haven’t been able to own real estate have to leave the area when property values skyrocket.

Wealth taxes are the real answer here, and for that reason they are unlikely to happen in the anglosphere unless there is some major political shift. In fact the United States does the opposite of a wealth tax, by taxing capital gains at a lower rate than regular income. Because the ruling class gets essentially all of their income from capital gains, they don't actually care about the tax rate on regular income. They can support progressive income taxes as a form of left-wing posturing, or as a way to pit high- and low-income workers against each other, knowing that the taxes won't hurt them. Raising the capital gains tax rate (even just to match the regular income tax rate) is never seriously discussed, and any suggestion of a wealth tax is completely out of the question.

How do you tax their offshore wealth?

The same way you tax everything else, with the IRS.

I don't think so. It seems to me that are policies are very clearly targeted to tax income earners, not capital owners.