Great post. I'd like to respond to some of your thoughts:
a) The *truly* wealthy get hurt the most by far. The ruling class will not let anything like this to happen. Other posters moaned about this hurting the middle class is a load of baloney. A small wealth tax would allow for a significant reduction in income taxes, sales taxes, or deficits.
The truly wealthy are only a tiny tiny minority of the population. All property claims function only by mutual consent of the public. So the wealthy, by themselves, are not really in a position to prevent a wealth tax from being instituted and collected. They need at least some amount of public support. They don't need anything close to unanimous support, but they at least need the support of say 10-20% of the population. They at least need an agreeable pool of people to hire mercenaries from, mercenaries who will defend their property by force from the disagreeing population. If no one at all is willing to defend the property of the wealthy, then the "wealthy" person is just one frail and fallible human being and is effectively powerless.
So the public consent is a huge deal. If the public consent is widely withdrawn on moral grounds, then the amount of friction and struggle needed to maintain enormous wealth is going to skyrocket.
b) Unless all jurisdictions do it, liquid capital will just move elsewhere (which is probably why wealth taxes are only widely used for real estate).
This situation is similar to a thief fleeing the country. Yes, the thief may take a big hoard of gold with her, but she also takes all the thieving activities with her as well. It's a short-term loss and a long-term gain. As long as the country has sane, pragmatic and aware trade policies for dealing with other nations, there is no easy way for externally located super-wealthy to exploit people inside the nation who isn't consenting to exploitation.
As long as people believe in themselves (which is a big if), they don't need the nanny-type super-wealthy to hand out jobs. Jobs exists purely as function of demand. If there is demand, there are jobs. The super-wealthy do not create jobs. Instead demand creates jobs and the super-wealthy position themselves as intermediaries between demand for goods and services and job creation. In computer network security terms, the super-wealthy is a man-in-the-middle attack on job creation. They interpose themselves between demand and job creation. But they don't interpose themselves purely by their own power. They do so with our willing, grudging, brainwashed, or apathetic consent.
c) Some assets are hard to value. There are ways of doing this, but they are all ugly.
True. But this isn't a real impediment. For example, we all know that going 120 miles per hour is dangerous on highways not purposefully designed for such speed. At the same time we also know that going 20 miles per hour is too slow. But where would we draw the line? Well, in reality it's not a problem. We draw an arbitrary line somewhere in a reasonable spot. Not everyone is going to agree. Not everyone will think it's perfect. But in these matters perfection is not necessary. You draw the line anywhere within reason and people will work with it. So does everyone agree that 75 miles per hour is the right number for the speed limit? Of course not. But it's within reason so for most people it's not something worth arguing about.
Another example of this is age of consent for sexual intercourse. Obviously 5 year olds cannot give meaningful consent. And 25 year olds certainly can. But where would you draw the line? It seems like one of those "impossible" problems, but in reality it's very easy. In reality it actually doesn't matter that much. Be it 16 or 18 years of age, you just plop down some number which is somewhat arbitrary but also within reason, and people work with it.
The point is that a system doesn't have to be perfect in order to be workable. So, as another example, stopping every single crook is not a requirement for the police force. If we thought that one crook escaping justice implied total failure, we'd never bother with policing to begin with. But we don't think that way. We accept less than perfect systems as long as they have a positive overall effect. And the same is true here. We don't have to catch every single tax evader. We don't have to make sure we collect every last penny of what is owed. As long as taxes are collected within a reasonable ballpark, it's OK and it's a workable system.
As a final note, I personally wouldn't want to tax all personal holdings universally. I propose to only tax wealth beyond a certain fairly large amount. This way, if you manage to accumulate say 10 million dollars of wealth, let it be tax-free. You can keep it, pass it to your descendants, and basically do more or less what you want with it. Once you get beyond 10 million dollars, wealth taxes begin to gradually grow. I'm just throwing a 10 million figure out there as a starting point. It's not something definite. What I am trying to say is that I am not against some people being wealthy. Nor am I against all wealth inequality. I realize people aren't equal in all respects and we shouldn't force them to be completely equal. But I also realize that an extreme wealth inequality is immoral and corrosive to society and it has to be dealt with one way or another.
