The flip side that's never mentioned. What about illiquid assets that have no market comparables such as collectibles and private companies, who determines the value? What about corporate entities, are they going to be taxed on "net worth"? If not, why not setup a shell holding company to transfer your wealth into it while you hold private shares with a par value of $0.01. Your $100B in company stock would now be $0.01 of wealth for you, while your shell company holds $100B on its books.
I'll add another wrinkle, once net worth is taxed, if you subsequently realize an asset sale, you've already been taxed on that asset, so do you get to deduct the tax that's already paid? Is the sale tax free? Since you never sold the asset, there's no transaction record, so what determines the value of that asset? For stocks is it the par value at issuance of $0.01? If it's the market price, what date / time is used? What if it's for a Picasso, who determines the value?
What about extraordinary events like Musk's $50B package being rescinded, would he be retroactively be able to claw back taxes paid on that net worth?
The other bit that's never discussed is that rich people don't like wealth taxes. France even scrapped theirs after 60,000 millionaires left the country as a result, leading to an overall decline in tax revenue. Make no mistake, anyone with wealth and accountants will exploit all possible avenues to avoid a wealth tax. For all the talk about billionaires pleading "tax me more", that's nothing but a front, anyone is free to donate as much money as they want to the Federal government. If Warren Buffet would like to donate $10B to the US government, good news, that's been an option since 1842, the link is right here, no congressional action required:
https://fiscal.treasury.gov/pu...
Oddly, no "tax me more" billionaire has elected to donate billions to the US government, maybe they don't know the treasury is ready and able to accept gifts?