This has been tried before (or rather, a wealth tax). It turns out to be extraordinarily difficult to administer, especially when people start owning a mess of companies or artwork that has to be appraised. It turns out that movement of money is the easiest thing to tax since it is an objective value.
A cliff like this also distorts behavior because people don’t want to loose a bunch of wealth if they go over in one year. Imagine having one great year where your company doubles in value to $2 billion dollars, but the next year there is a crash and it halves in value. You personally are down to 0.5 billion, less than you started. Tax policy should make it difficult to remain obscenely wealthy, but not impossible.
Sure, it is complicated. But there are only so many billionaires. My countries spends way more resources on controlling the poor than a billionaire wealth tax would ever cost.
This has been tried before (or rather, a wealth tax). It turns out to be extraordinarily difficult to administer, especially when people start owning a mess of companies or artwork that has to be appraised. It turns out that movement of money is the easiest thing to tax since it is an objective value.
A cliff like this also distorts behavior because people don’t want to loose a bunch of wealth if they go over in one year. Imagine having one great year where your company doubles in value to $2 billion dollars, but the next year there is a crash and it halves in value. You personally are down to 0.5 billion, less than you started. Tax policy should make it difficult to remain obscenely wealthy, but not impossible.
Sure, it is complicated. But there are only so many billionaires. My countries spends way more resources on controlling the poor than a billionaire wealth tax would ever cost.
My recollection is that it costs nearly as much to administer as it provided. At a certain point, there’s just not much point.