Paul GrahamVerified account

With all due respect, isn’t this also true to home ownership (ie property taxes), yet people still flock in hoards to buy houses. For CA, a state where house demand has historically skyrocketed, the “property tax” can easily be 1.25%.

It’s an interesting point, but property taxes are effectively swamped by the way mortgages work, so that you still end up owning more of your house every year, whereas @paulg’s point is that you’d own less of your company every year.

yeah but the point is it's a marginal tax rate. if you're wealthy enough to be impacted by a wealth tax, then you SHOULD be paying higher taxes. we got a society to fund here, after all...

Your calculation assumes that the base "wealth" is static and never grows through investments. In a normal situation, part of the growth would be taxed via normal income tax. The other part would be counteracting (in parts or totally) the effect of the wealth tax.

You on the other hand may be discounting the fact that a wealth tax would discourage investment and innovation. I imagine the effects of a wealth tax would eclipse any potential wealth gains.

You should mention that the wealth tax only “erodes” wealth above some threshold (30-50 million)

Right. Who is proposing a wealth tax on people who are not very very wealthy?