As you know, taxing wealth is unconstitutional. So your yada, yada is a moot point.
IF we were to tax increases in wealth, would the government give tax credits if someone's wealth decreases?
From one rather down to earth point of view, Willlie Sutton had it right: “I rob banks because that is where the money is.”
Of course I am no Willie Sutton, and I certainly don’t think that taxation with representation is robbery!
On the other hand you have another opposite view, expressed well by John D. Rockefeller, one of the country’s richest men who opposed the 1913 16th Amendment that authorized the original federal income tax (limited at first only to the very wealthy):
“When a man has accumulated a sum of money within the law. . . the people no longer have any right to share in the earnings resulting from the accumulation."
Rockefeller was apparently referring especially to federal “capital gains” and taxes on profits, which were also set up by federal legislation at that time.
Outside of property taxes, which are normally taxed by states under our Federal system in the U.S., there have been (mostly not very successful) attempts in Europe to tax “wealth” directly. The problems emerged there largely because of the difficulty of measuring the value of different kinds of “wealth” for tax purposes … which you indirectly referred to when you pointed out that “assets” can of course decline, as with the stock market, or the value of assets like land, housing, office buildings or art and other intangibles.
This is why I personally usually only emphasize that rising wealth concentration and corresponding poverty in society is a growing problem for our democratic culture and our whole social and political system.
I acknowledge the idea of direct federal “wealth taxation” is problematic and would be difficult to design and impose in practice even if limited only to mega-rich “oligarchs.” We see how difficult a task getting desperately needed state revenue from oligarchs is in many underdeveloped or corrupt capitalist countries, especially where wealth differentials in society have gotten out of hand entirely.
New creative ways to finance pressing state and social needs and yet create more “equal opportunity” and social solidarity in society are necessary. We should at least recognize that traditional “progressive income tax” is today a joke to, and successfully avoided by, the mega-wealthy.
