Anybody who was crying about a wealth tax last year looks like a damn fool. Bezos lost 25% of Amazon in a divorce and is richer today than he was before the divorce, He's also sold large chunks of his shares too and yet he's richer than ever. A wealth tax as proposed by Elizabeth Warren on 2% over $50 million and 6% over a billion is needed.
We already have a tax for when people get a lot richer in a particular year, it's called an income tax.
If that's the issue why not raise rates, maybe creating some new brackets, rather than a whole new kind of tax?
Because this taxes economic activity and the rate at which one amasses a certain kind of economic power, not the power itself. That can have negative effects in the wider economy beyond a certain level (n.b. not net negative at the current level by a long way, IMO) and also cannot account for people who are so wealthy that they amass power off of interest. Slowing the rate at which more wealth is acquired does not really solve the problem of a class of people wielding excess influence off of the wealth they’ve already amassed.
Scaling down from billionaires as an example, there are often vast differences in the standards of living between households earning the same income because of ownership (or the lack of) property (in addition to other costs-of-living issues, although it’s far more important than most of the rest). Indeed, the black American middle class has especially suffered since the 2008 crisis (compared to exclusively white households with similar income levels) precisely because of property ownership. Income tax can be useful, but often too blunt a tool in isolation.
The Wealth Tax is not levy on economic activity, because it is not a transaction. It's at tax on the sum of assets and liabilities on your balance sheet, which would fall under a direct tax. The Federal Government cannot directly tax wealth, and it cannot directly tax Real Estate. The state can tax Real Estate, and the Federal Government can tax income derived from that property (source of income). Once someone sells the house (transaction), then the Federal Government can tax the profits of the economic activity as it it is another source of income. The Supreme Court has directly addressed this issue, and it comports with all previous decisions. It is unconstitutional under Article I, section 9, clause 4, in conjunction with the canons of constitutional interpretation regarding the 16th Amendment. Congress cannot tax a possession.
Additionally, demanding that someone liquidate appreciating assets to pay a tax on wealth that was derived from income already levied by the Federal Government could be argued as a bill of attainder. If someone owns stock, you've essentially punished them by taxing them before they realized profits from a sale, and you're going to require them to pay capital gains. You could also be impairing the obligations of a contract you have with investors or a divorce settlement agreement requiring you to hold those shares.
Then there's the fifth amendment claim. And it just goes on and on.
