You know, I was thinking about this the other day while looking at my own finances. I have a 401(k), some savings, and the value of my house. If the government decided to tax me on the total "wealth" of those things every year, even if I hadn't sold them and didn't have cash, I'd have to come up with money I don't physically have. That's the first fundamental problem. DataDriven_Dan will probably talk about inequality and funding public goods. And look, I get the frustration. It feels unfair when you see massive fortunes. But we have to start from first principles. What is wealth? It's not a pile of cash. It's mostly assets—ownership in companies, factories, land, intellectual property. These aren't static. Their value is an estimate, and it fluctuates wildly. A wealth tax assumes we can accurately value everything someone owns, every single year. That's a massive, expensive bureaucracy right there. But more importantly, it fundamentally misunderstands how that wealth is created and used. That "wealth" in a company isn't just sitting there; it's capital that's being deployed. It's building new factories, funding R&D, creating jobs. Taxing the principal itself is like taxing the seed corn instead of the harvest. You kill future growth. The goal should be to encourage the productive use of capital, not to force its liquidation to pay a tax bill. If a founder has to sell 2% of their company every year to pay a wealth tax, they lose control, and the incentive to build something massive in the first place diminishes. We're not just taxing "rich people"; we're taxing the engine of innovation and long-term investment. There are better ways to address inequality. Fix the income tax code, close loopholes on realized capital gains, invest in education and mobility. But a direct tax on wealth? It's a solution that sounds simple but ignores the mechanics of how wealth actually functions in an economy. It punishes the form of savings—investment—that we should want the most.

Okay, let's take Dan's numbers at face value. He says a tax on fortunes over $50 million hits 75,000 households and raises $3 trillion. Let's break that down. That's an average of $40 million per household, per decade, or $4 million per year. That's not a tax on income; it's a tax on assessed value. So every year, these people have to find $4 million in cash. Where does that cash come from? They have to sell assets. That means every year, a chunk of Amazon stock, or Tesla shares, or a piece of a private company gets sold to pay the taxman. Who buys it? Likely larger institutional pools of capital, or foreign wealth funds. Over time, you get a massive, forced transfer of ownership and control of American companies away from the founders and long-term builders and toward passive financial entities. Is that the outcome we want? To systematically dismantle concentrated ownership in the very companies that drive progress? Dan mentions property tax as a precedent. But that's a terrible analogy. My house is a consumption asset. It's not a factory. Taxing a piece of land I live on is not the same as taxing my ownership stake in a rocket company or a pharmaceutical lab. One is a place to sleep. The other is a piece of productive capital that coordinates resources and takes risks. He cites studies showing no impact on growth. But those are looking at static economies, or European wealth taxes that largely failed and were repealed because capital fled. They're studying the past. The first-principles question is: what signal does this send? It tells the next Elon Musk or Steve Jobs that if they build something incredibly valuable, they won't just be taxed on the profits they take out, but on the value of the thing itself while they're still building it. You're taxing the factory while it's under construction. That changes the incentive at the most fundamental level. You'll get fewer people trying to build the massive, world-changing companies, and more people optimizing for liquid cash flow to pay the annual wealth tax bill. The $50 trillion wealth transfer he mentions is a problem, I agree. But the solution isn't to break the machine. It's to fix the leaks. Tax realized capital gains at income rates. Tax huge inheritances. But a recurring tax on the principal of wealth is a direct attack on the structure of long-term, illiquid investment. It confuses having wealth with using wealth. We should want people to have wealth tied up in businesses, not in yachts. This tax incentivizes the opposite.

Dan keeps pointing to data on implementation and average payment rates, but he's missing the core mechanical flaw. Let's rebuild this from the ground up. The fundamental question isn't if we can value assets or if billionaires have cash flow. It's what behavior this tax incentivizes at the margin. He says the average billionaire pays 4% of their income. But that's the average. For the wealthiest, whose fortunes are in a single, volatile stock—think a Musk or a Zuckerberg—their "income" might be near zero. The tax liability on their shares could be enormous compared to any cash salary. So they are forced to borrow or sell. You're telling me borrowing billions against a stock portfolio to pay a tax bill isn't a systemic risk? That's creating a fragile, leveraged system where a market dip could trigger a fire sale. He dismisses the liquidation fear as a scare tactic, but it's first-principles logic. If you tax an illiquid thing, you create a need for liquidity. The money has to come from somewhere. Borrowing just kicks the can and adds interest costs, making the eventual sale larger. This isn't about today's billionaires; it's about the next generation of founders. The signal is clear: don't build a company where your wealth is locked in growth. Instead, structure your holdings for maximum cash distribution to cover the annual tax. You're literally punishing the type of patient, long-term capital that builds transformative companies. And on the "backstop" argument—that the income tax is gamed—I agree it's broken. But his solution is to add a complex, novel tax on top of a broken system, rather than fix the foundation. The problem is the loopholes: stepped-up basis, carried interest, obscure trusts. A wealth tax doesn't close those; it just layers on more complexity and creates new loopholes of its own, like hiding assets in harder-to-value forms. We saw this in Europe. The money and the lawyers will always be faster than the bureaucracy. The real issue is that we're having the wrong debate. We're focused on seizing static wealth rather than dynamizing the system. True progress means fixing the income and capital gains tax code so the harvest is actually taxed, and making it profitable to invest that wealth into new ventures, not just guard it. A wealth tax does the opposite. It makes guarding liquid assets more rational than building illiquid ones. That's a terrible trade for everyone's future.

Dan, you keep citing studies about today's billionaires having enough liquidity. But you're missing the point entirely. This isn't about them. It's about the next guy. The fundamental incentive changes. Let's say I'm an aspiring founder. I see that if I succeed beyond my wildest dreams and create a company worth $50 billion, I will owe a billion dollars a year in wealth tax, even if my company isn't profitable yet. My choice is now: do I keep all my equity to control and grow the company, or do I start taking huge salaries and dividends from day one to generate the cash to pay that future tax bill? The rational move is to optimize for liquidity, not for long-term growth. You are literally designing a system that punishes the patient, illiquid, high-risk capital that builds the future. Your data on historical tax rates is irrelevant. We've never had a recurring federal tax on unrealized gains. This is a new beast. And the European experiments failed because capital fled or hid. You say modern valuation can fix it, but that just means we'll have a massive, expensive tug-of-war between the IRS and an army of lawyers creating complex trusts and moving assets offshore. The money will go to lawyers and accountants, not to childcare. You say the income tax is politically impossible to fix, so we need this backstop. That's a defeatist argument. Adding another broken, complex layer because the first layer is broken is not a solution; it's compounding the problem. The real first-principles fix is to simplify. Eliminate stepped-up basis. Tax capital gains as income. That attacks the actual problem—unrealized gains escaping tax forever—without creating a perverse annual tax on the principal. Finally, you talk about the wealth increase during the pandemic as proof of imbalance. I agree it's staggering. But the solution isn't to tax the stock price of Tesla or Amazon while they're building the future. It's to ensure that when those gains are finally realized and turned into consumption, they are taxed properly. A wealth tax confuses a paper valuation with cash. It's a solution that sounds righteous but fundamentally misunderstands how wealth is created and, more importantly, how it needs to be deployed to create more for everyone. We should want fortunes tied up in companies, not spent on tax lawyers. This policy incentivizes the exact opposite.

But have you ever stopped to ask what the actual goal is here? Dan, you're citing all these studies about revenue and tax rates, but you're skipping the most important question: what does this policy actually do to the structure of capital? Let's rebuild this. You say the tax liability is a small fraction of a billionaire's annual wealth increase. That's a static observation. The dynamic effect is on the margin. Every single financial decision at that level is about opportunity cost. If I know I have a 2% annual drag on illiquid holdings, I am now incentivized to shift my portfolio toward assets that throw off cash flow to cover that tax. That means favoring dividends over reinvestment, buybacks over R&D, and liquid investments over long-term, illiquid bets. You are systematically disfavoring the exact type of capital—patient, locked-in, risk-taking equity—that builds new industries. Your point about historical high income tax rates is a red herring. Those taxed realized income. You could still plow everything back into your business tax-free. A wealth tax is different. It taxes the principal regardless of whether you generate a dime. That changes the fundamental calculus of investment. You keep falling back on public distrust of Congress to fix loopholes as a reason to enact this new tax. That's admitting defeat and adding complexity. If the political system is too broken to fix a loophole like stepped-up basis, what makes you think it will be competent enough to run a flawless, evasion-proof national wealth valuation scheme? The European experience shows capital will just hide or flee. The money will go to lawyers creating complex trusts, not to teachers. Finally, you talk about the revenue funding public goods. I want those things too. But you're proposing to fund them by taxing the seed corn of the next generation of companies. There's a better way: tax the consumption of that wealth. A robust inheritance tax, properly applied, captures wealth when it's transferred without productive purpose. A fixed income tax on realized gains closes the loophole. That targets the use of wealth for consumption, not the existence of wealth for production. The wealth tax mistakes a symptom—large paper valuations—for the disease of inequality. The cure is to fix the rules so success is rewarded and consumption is taxed, not to install a meter running on the factory floor. That just guarantees we'll have fewer factories.