World's richest 500 see their wealth increase by $1T this year

Nothing except the 1%-ers who are pulling up every ladder behind them they can.

My intent was only to use it as an example. You can change the percentage to anything you want, as long as it is low enough not to have an effect on Warren Buffett's consumption. And if it has an effect on Warren Buffett's consumption, then you could do the same thing with a consumption tax so that wouldn't be an argument for taxing wealth over taxing consumption.

> In your extreme scenario, there would be an increased demand for food. Greater demand would increase prices. This would move the allocation of resources to food production from, say, Ferrari production. You would have more food production and poor people would eat better.

Indeed. But this is just as true if the spending on food is funded by a consumption tax. This is an argument for taxes, not an argument for income or wealth taxes over consumption taxes. I also believe taxes are harmful in general, but that's a separate point from whether a consumption tax should be preferred over an income or wealth tax.

> The outcomes of taxation and other economic levers are never represented by monotonic functions. The optimal options are always somewhere "in between" the extremes,

I don't see why this ought to be true and you did not provide any evidence to support these claims.

> so saying "taxing at 100% doesn't work, so we should tax at 0%" is a fallacy.

It is, but not for the reason you stated. Saying "taxing at 2% doesn't work, so we should tax at 0%" would also be a fallacy if the optimal tax rate happened to be 1%. This has nothing to do with extremes.

Then tax consumption enough to pay for the food accounting for the consumption tax that will apply to the food. That the amount of money you need to pay for the food increases as the consumption tax used to pay for the food increases is not a problem as long as anything at all other than food is being consumed in the economy. (If it happened to be the case that nothing other than food was being consumed, that would just mean it isn't possible to supply enough food—an income or wealth tax wouldn't be able to change anything about this.) The consumption tax needed for the government to pay for the food will be lower than the income or wealth tax that would be needed for the same thing.

Taxing investment to pay for food is only going to work insofar as it reallocates resources from the production of whatever the investments were in to the production of food. A consumption tax can already do this reallocation more efficiently. If your goal is to make the economy produce more of food and less of other things, this goal can be achieved more efficiently with a consumption tax than with an income or wealth tax.

> That's the bad of taxing consumption - that it naturally taxes more the poor, making them even poorer, than the rich.

It only taxes the poor more in proportion to their wealth, to the extent a higher proportion of the wealth of the poor is consumed instead of invested, but not in absolute terms. In absolute terms, it is the reverse, since the rich consume on average more than the poor even if this consumption is less as a proportion of their wealth. The tax on consumption taxes your absolute consumption, not your consumption as a proportion of your wealth, so it does make the poor better off in relation to the rich.

> But if you admit that some public services are necessary (eg police, defense from external threats) then it's obvious that a 0 tax rate is bad - 0 taxes mean 0 public services.

Even if these public services could not be provided without taxes, the reason having no taxes would be bad would not be that it is an extreme. But public goods can be provided without taxes. For the police, courts and laws, chapter 29[1] of The Machinery of Freedom describes one way this could be done. National defense can be funded with dominant assurance contracts, as can many other public goods (even when they can't be made excludable), including lighthouses, scientific research, information goods such as books, software, or art, clean air, and free-to-air television. So even if some public services are necessary or even just desirable, it is not obvious that having no taxes is bad as they can also be provided without taxes.

[1]: http://www.daviddfriedman.com/Libertarian/Machinery_of_Freed...