This seems to be willfully eliding that proposed wealth taxes tend to either be taxes on wealth
above a certain amount, or (such as California’s) a
one-time tax on people with wealth over a certain amount. If I were a mere millionaire -- technically, I am, with a net worth of
just over $1.1M, but this would be true if that were $5M or $10M or even $50M -- then under any proposal I’ve seen, my wealth tax would be $0. (Note that if someone were to have $50M, then under Graham’s risk-free rate of return of 5%, they would literally have to do
nothing to pay themselves an “income” of $2.5M annually.)
If I were an actual billionaire -- say, my net worth was $2B -- then my one-time tax under California’s proposal would be $100M, leaving me with a net worth of $1.9B. Under that 5% risk-free rate of return, I would recover that amount of money within one year even if my income were $0, which seems exceedingly unlikely.
One can argue about the specifics of various proposals -- the Tax Foundation, for example, thinks California’s proposal has “aggressive design choices and possible drafting errors” that could lead to somewhat bonkers results, although I haven’t seen any critiques of their analysis yet -- but a wealth tax cannot be converted to income tax in a reasonable manner any more than a VAT could be converted to property tax. They’re both taxes, but they’re simply not the same kind of tax. And while I don’t mean to cap on Paul here, there’s a distinct “woe, pity the poor billionaires who will surely be driven to bankruptcy” subtext I find to be risible nonsense.