Taxing liquid capital is fairly straightforward, especially if it’s tied to income (like company founders owning shares).
Taxing non-liquid assets is complicated because it’s hard to make it fair in cases of family home inheritance and similar situations.
But taxing use of assets as collateral for loans (to create liquidity from a non-liquid asset) should be reasonably fair, it can be treated as an advance on capital gains taxes on the collateralized asset.
RunawayFixer@lemmy.world 1 month ago
If you try to take too many eggs out of 1 basket, the person carrying that basket is likely to try and run away. So it’s easier and less disruptive to take a few eggs out of lots of different baskets.
Taxing accumulated capital without exceptions is also guaranteed to screw people over. The man in the OP is a good example: he’s a modest man who many years ago bought a modest house for a modest sum of money. Due to circumstances, that house has now increased in value, making him a wealthy man on paper. But he’s deriving no income from that wealth, since he can’t rent it out because he lives in it himself. So now he’s a modest man, who is rich on paper, who is expected to pay high taxes on his paper wealth, turning him into a poor man who is barely scraping by.