The vast, vast majority of wealth (to the wealthy) are in form of company ownership, stocks.
So let's say you start taxing the ultra-wealthy based on their assets. They then have the option of:
1) Make the company pay out dividends, so that owners can afford to pay their wealth tax. Not ideal, because what happens during bad years where there's no dividends to be paid out? Or if companies want to re-invest in the company?
2) Sell stocks. Again, not ideal. This would mean that you lose some ownership year by year.
3) Take up personal loans to cover taxes.
etc.
Note, I'm NOT saying that we shouldn't do anything. But this is just the consequence of such assets (stocks) being the dominant asset among the wealthy.
So let's say you start taxing the ultra-wealthy based on their assets. They then have the option of:
1) Make the company pay out dividends, so that owners can afford to pay their wealth tax. Not ideal, because what happens during bad years where there's no dividends to be paid out? Or if companies want to re-invest in the company?
2) Sell stocks. Again, not ideal. This would mean that you lose some ownership year by year.
3) Take up personal loans to cover taxes.
etc.
Note, I'm NOT saying that we shouldn't do anything. But this is just the consequence of such assets (stocks) being the dominant asset among the wealthy.