No it doesn't. The only way to get rich is to save. The incentive to save still far exceeds the incentive to spend.
If I have a savings account with $200k in it and I can manage to put $10k a year into it, what incentive do I have to keep that account? Put in $10k, take out $10.5k to pay taxes. Let's say I have a great interest rate of 1% on that account. I wind up with $1.5k more money in that account after putting $10k in. (Those are round numbers for argument only, so don't waste our time insulting me for not calculating things to the penny.)
My best option is to withdraw all my savings and store it in the backyard. That way the government doesn't know I have it and I immediately save at least $10k a year just in taxes. Add the $10k I put in with it and I'll have a full $210k, or $8.5 thousand dollars more than if the money was in the bank. Yeah, I'm "saving", but only because I'm hiding the money.
Other people would figure this out. The rich people you hate so much have lawyers and accountants who will run the numbers and tell them to pull their cash out of the banks, too. Do you not realize what a mass exodus of money from the banking system means? Interest rates on loans will skyrocket as the money supply dries up.
If you merely keep an IRA as tax free, effectively the middle class starts to save,
IRAs are already "tax free", and if the middle class isn't dumping money into them now to reduce their income tax burden, then they aren't going to be dumping money into them when the gurps owning-stuff tax kicks in. They MAY transfer other money in their accounts to the IRA to legally keep from paying taxes on it (so no change in the savings), but most likely there will be limits to IRA contributions (like there are now) and they'll just take their money out of the bank to protect it.
Don't try claiming that IRAs won't have contribution limits. If they don't, then you've just created yet another legal loophole to avoid taxes. If you try to keep people from dumping all their money into a "gurps-IRA" to keep from paying taxes on it, you'll have to do something like mandate that money that goes in cannot be taken out until the owner reaches a certain age. That will disincentivize the gurps-IRA since people need to know they can get to their money in an emergency.
And why save at all, if the government is simply going to start taking 5% of whatever you save away from you every year you have it? You have no clue as to human nature.
The key thing is this is a simple tax structure that soaks the wealthy,
You first claimed that taxing what people own doesn't screw anyone, and you called me stupid for pointing out how many people it would actually screw. Now you admit that you proposed the idea precisely because it screws the rich. But it also screws EVERYONE who owns anything -- rich, poor, middle class. Having the government come take 5% of everything you own away from you every year cannot help but screw everyone who has stuff. I'm not part of the 1% and even I am smart enough to know how this would destroy my retirement savings and home ownership possibilities.
That you continue to claim this would be a good system, well, I dunno. Your hatred for successful people is blinding you to the facts.
Here's another fact: taxing people on what they own means that the car that the poor person needs to own to get to work will be costing him 5% of the value every year just in federal ownership taxes. You don't think that screws him, but that 5% ($1k on a $20k car) may be the difference between food and hunger for him. Of course, if he can't afford the taxes, he shouldn't buy the car.
In other words it reduces the gap between the wealthy and the poor,
Yes, we understand the concept of forced wealth redistribution using the tax system as a bludgeon on the people who have any wealth at all.