You still have a massive massive number of loop-holes to fill and complexities to answer for.
Does my collection of rare coins count as one asset as a whole, or individual assets that are each under X amount? Who decides what my random painting is worth so I know if I have to declare it? What happens when my asset depreciates?
Also, once you go to X being "somewhere in the neighborhood of a house" you lose a TON of taxable income with this policy to the point where it's probably not worth it. You're not going to gain much money taxing a few mega-yachts and rare paintings, especially when you have to include the money spent dealing with more complicated taxes and audits.
We can just raise income and capital gains taxes instead and it's a whole lot easier. Wealth taxes that include assets are so fragile and complicated.
The purpose of a wealth tax is (mostly) not to raise revenue, it is to provide a downward pressure on the wealth of the wealthiest individuals.
I also think you're making a poor estimate of what the distribution of wealth looks like. Yes, there are lots of small items, but the vast majority of wealth is stored in items/things/land/etc. of significant value. Perhaps more than anything it is stored as equity in companies. For income taxes the top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent). For wealth the distribution is even more skewed.
I agree there are a lot of things to figure out. That was and is true of our current system too. At one point the rules for all its loop-holes didn't exist and they had to be created and that didn't happen overnight.
If your asset depreciates, then you say its worth less next year. You decide what your random painting is worth. If you don't report an asset that should be reported, I can see multiple mechanisms:
(1) You sell it for more than X. At this point it becomes clear it should have been reported and back taxes are owed.
(2) You bought it for X. If you don't report, questions would be asked.
(3) There is no record of purchase and you never sell it. You might avoid paying taxes. I'm not sure what assets of significant value (over $500K) would fall into this category.
I don't have a great answer completely off the cuff about how to deal with things like a collection of rare coins. Perhaps the best answer is the easiest answer: they are just treated separately.
> The purpose of a wealth tax is (mostly) not to raise revenue, it is to provide a downward pressure on the wealth of the wealthiest individuals.
Sorry, what? Taxes should always be about raising money for various projects that benefit the country. If we can't see eye-to-eye on that I don't think we'll find common ground here. I'm not looking to punish rich people for being too rich. I'm looking to fund public projects like healthcare, infrastructure, and education.
If we have different goals that are both achieved by the same means, I don't see the problem.
I think raising money through the tax is important, but I think a more important long-term function of a wealth tax is to ensure that large fortunes eventually revert to the mean rather than sustaining in perpetuity for generations. (Unless they continue to be invested with above average returns for generations.)
Also - there are many taxes that exist not for the purpose of raising revenue, but for the purpose of a policy goal. To deny this would be to deny how a great deal of how modern public policy works.
Does my collection of rare coins count as one asset as a whole, or individual assets that are each under X amount? Who decides what my random painting is worth so I know if I have to declare it? What happens when my asset depreciates?
Also, once you go to X being "somewhere in the neighborhood of a house" you lose a TON of taxable income with this policy to the point where it's probably not worth it. You're not going to gain much money taxing a few mega-yachts and rare paintings, especially when you have to include the money spent dealing with more complicated taxes and audits.
We can just raise income and capital gains taxes instead and it's a whole lot easier. Wealth taxes that include assets are so fragile and complicated.