A Wealth Tax Is a Machine for Capital Destruction
Taxing unrealized paper values would punish the investment that builds companies, misfire on valuation, and raise far less than promised. Europe already ran this experiment.
The case against a wealth tax begins with what wealth is. The fortunes in question are not vaults of cash; they are ownership stakes in operating companies, the pledged capital behind payrolls, factories, and research. An annual levy on those stakes forces liquidation on a schedule set by the calendar rather than the business, converting productive ownership into government revenue at exactly the moments companies can least afford it.
Then comes the machinery. Taxing unrealized value means appraising private companies, farmland, and illiquid stakes every year, an invitation to a valuation industry, a litigation industry, and an avoidance industry all at once. Europe ran this experiment across a dozen countries; most repealed their wealth taxes after watching compliance costs climb, capital migrate, and revenue disappoint. The countries that kept them collect modest sums from bases far broader than billionaires.
The honest alternatives are sitting in plain sight: taxing gains at death instead of forgiving them, tightening the borrowing loopholes, enforcing the code that already exists. Those reforms raise real revenue without annually appraising the private economy. The wealth tax endures as a political symbol precisely because it is one; as policy, it is the expensive way to collect less.