Once a 'one-time' wealth tax is implemented to cover deficits, it removes pressure on politicians to manage finances responsibly. The tax becomes a recurring tool, and the definition of 'wealthy' inevitably expands as the original tax base leaves the jurisdiction.

Underfunding the IRS is not a neutral act but a policy choice that disproportionately benefits the rich. Auditing complex, high-value returns requires significant resources. A weakened IRS cannot effectively pursue wealthy tax evaders, creating a massive "tax gap" that functions as a stealth tax cut for the top earners.

Despite voter popularity, broad wealth taxes are historically ineffective. Most OECD countries have abandoned them due to low revenue, administrative complexity, and capital flight. A more practical approach is to focus on targeted reforms like closing the carried interest loophole and taxing capital gains as ordinary income.

Congressman Ro Khanna proposes a tax on the total net worth of individuals with over $100 million. Unlike an income or capital gains tax, this targets unrealized wealth, forcing the liquidation of assets like stocks to generate the cash needed to pay the tax.

Instead of taxing unrealized gains, which forces asset sales and creates economic distortions, a more sensible approach is to tax the cash that wealthy individuals borrow against their assets. This targets actual liquidity and avoids punishing the long-term investment that builds the economy.

Instead of focusing on changing the tax code, the most significant tax benefit for the ultra-wealthy has come from systematically cutting the IRS budget. This prevents the agency from auditing complex returns, effectively making the wealthy 'protected by the law, but not bound by it,' and creating a massive enforcement gap.

Billionaire wealth taxes are easily dodged by relocating. A more robust policy would tax capital gains based on the jurisdiction where the value was created, preventing billionaires from moving to a zero-tax state just before selling stock to avoid taxes.

The US tax system disproportionately penalizes high-income 'workhorses' (e.g., doctors, lawyers) who earn from labor. In contrast, the super-rich, who derive wealth from capital gains and have mobility, benefit from loopholes that result in dramatically lower effective tax rates.

Citing his firsthand experience with France's wealth tax, Manny Roman argues such policies often prove disastrous. The wealthy are mobile and can "vote with their feet" by moving to lower-tax jurisdictions like Belgium or Switzerland. This mobility undermines the intended tax base, rendering the policy ineffective.