It would only be a tax on capital gains, not on the principal. And philosophically, why should investment income be treated any differently than income gotten due to effort?
Property tax is a sort of wealth tax. It goes to fund local services that the occupants of that house presumably consume, though.
Inflation + capital gains tax => tax on principle. The actual rate would be low, though.
It's an effective tax on principal if you tax nominal capital gains. If you want it to be a tax on actual "income" in real terms it needs to be a tax on real (i.e. inflation adjusted) capital gains. How much of a tax on principal it is depends on the inflation rate, of course; right now it's not much of one, but back in the 70s it would have been a bigger deal.
To avoid discouraging savings, the wealth tax could be progressive. The tax on the average citizen's savings is negligible but rentiers pay a substantial portion.
I think an inheritance tax is especially important to prevent the formation of generational wealth.