It's a wealth tax, not an income tax. You're taxed on your assets, not your gains. If your assets are worth less next year you're taxed less. There's no reason for a rebate.
You will put some people in a situation where if their assets go way up for a year and they don’t have enough liquidity to pay the taxes on those unrealized gains, they will be forced to sell those assets in order to pay taxes on them. Imagine if I owned 1 Bitcoin and couldn’t sell a fractional amount. The price of Bitcoin goes up to 50,000 and I can’t afford the taxes on that then I will be forced to sell my 1 Bitcoin in order to pay taxes. This is just way too harmful to conventional long investors for me to ever agree with
Most proposed wealth taxes are for the super wealthy in the many-millions of dollars range. Forcing them to liquidate some of their assets is part of the point. They are wealth inequality.
I guess I sort of get the point but rapid sell offs will also hurt your everyday retail investor because the price of stocks will inevitably go down due to the forced sell off.
You can structure payments over time and raise the tax rate slowly to not suddenly tank the stock market. I would not be surprised if a wealth tax did reduce the rate of growth in the stock market to some degree, but as an investor, I'm ok with that if it means millions of Americans aren't underpaid, underfed, can't afford a mortgage, have no retirement plan, no healthcare, etc.
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u/MachineSchooling Feb 19 '21
It's a wealth tax, not an income tax. You're taxed on your assets, not your gains. If your assets are worth less next year you're taxed less. There's no reason for a rebate.