That's a neat idea but might be a hassle to enforce, since people could use different registrars, etc. I really like the idea of making domains taxable like property, simply because the tax system already exists and is ruthlessly effective.

Combine that with, say, a price rise to $100/yr minimum charge per domain; that could include, say, hosting services or an ssh cert or something, the point is you cannot pay less than $100 per year per domain you own. That would hit the domainsquatting industry like a nuclear bomb.