People pay property taxes every year on assets that change in value without selling (ie unrealized gains). Nobody seems perplexed by that. But can't seem to figure out how it works for stocks.
Regardless of if you agree or disagree with doing it (which I'm not pushing for or against here), it's not a complex concept.
Land value tax is the proper way to go, questions of how to value land aside.
The issue with a wealth tax is it’s inflationary - most taxes are deflationary but a wealth tax forces you to sell assets to get their cash from them. It does encourage rich people to mark up their assets less, which might reduce apparent income inequality aka make poor people less jealous of them…
There’s no way to borrow against a property to pay a 2% tax for mor than fifty years, for example. You need an outside source of funds, or appreciation.
Right. That’s the idea. Create value or sell the property to someone who will.
If it encourages people to undervalue, or lower the value of something, I don't see how that's inflationary. Could you explain how it would be inflationary?
Lower asset values aren’t deflation because “asset inflation” isn’t inflation. You can’t eat assets and it doesn’t matter if their prices go up because you can buy fractions of them. Asset inflation (the theory that 2010 QE was causing inflation “in the stock market” even though we didn’t see it in goods) is a crank theory from online people who think central banks print money.
Believe me, as a European living in an American city currently “booming”, not only am I perplexed by it but also wonder how in the hell Americans have put up with it for so long.
The negative effects are quite plain to see as people get pushed out of their homes by the wealthy moving in from other states, and yet people seem to want to apply the same fundamentally flawed logic to other asset classes too.
Hard for me to make sense of taxing unrealized gains. Not even France could make a wealth tax work, and they tax everything.