> If you tried to place that restriction on capital gains, everyone ounce of capital in the this country would flee.
Feel free to take your capital out of the country. It'll be taxed with an expatriation tax. Attempting to evade the tax will allow the IRS to confiscate assets anywhere in the world the US has a tax treaty with (ie everywhere).
Would you take a bet on a coin flip, if when you lost you paid a dollar, but when you won you'd get a nickle.
Banks would implode. The credit market would stop. Any business survive on a line of credit would just fail immediately.
Best case scenario, you'd just replace American rich for foreign rich.
[1] if you tried to tax foreign capital gains on American assets, you'd just destroy the entire economy. There would be huge lack of capital.
Your plan is insanity.
Edit: And some country would be creative and end tax treaties with the US just to get a couple trillion of capital flowing through their economy.
That is just a bad plan. You are essentially outlawing income over a million.
If you didn't apply it to capital gains, you are just fucking over lawyers, bankers, consultants, and CEOs. It would actually lower tax revenue. Because all that money that is getting taxed over a million a year would disappear. And the truly mega rich would actually be better off. No more having to pay high priced lawyers, bankers, and CEOs.
If you tried to place that restriction on capital gains, everyone ounce of capital in the this country would flee.