[edslunch]

This discussion is moot while capital can flee to other countries, but here’s a formula that might work. Legislate that everyone must declare an annual income of at least 1% of financial assets, whether you take the income or not. For example, if you have $1M saved you need to declare income at least $10K. If you have a job your income will be well more than that so you just declare your actual income. There would be no impact on the average person.

If you’re a high net worth individual, on the other hand, and have $100M in stock and minimize your income by taking loans instead of cashing stocks or other gamesmanship, you’ll still be on the hook for a ‘virtual income’ of $1M. You’ll need to sell shares to pay your taxes but you won’t be forced to liquidate your holdings or have them ‘confiscated’ by the government.

If you’re Elon or Bill you would have taxable income in the $100Ms or 1Bs.

With this minimum income in place everything else is just normal taxation. The government can play with rates and could ratchet up tax rates for high incomes e.g. 50% for the highest bracket. Even then it only amounts to 1/2 a percent of net worth, which is a rounding error compared to what a portfolio earns, but it would apply to everyone’s net worth so the tax base is huge.

Again, it won’t affect the average person. Someone making $100k per year would need more than $10M is savings to get hit with extra tax.

Why wouldn’t this work, ignoring the portability of capital?