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.

The "Buy, Borrow, Die" tax strategy concentrates immense wealth, making the broader economy unhealthily dependent on the spending habits of the ultra-rich. As noted by The Wall Street Journal, this creates systemic risk; if the wealthy pull back spending, it could trigger a recession.

A proposed wealth tax in California triggered a significant flight of capital and high-net-worth individuals, even without becoming law. The key factor was the failure of politicians to uniformly condemn the proposal, which was perceived as a threat to fundamental property rights, signaling a hostile business climate.

Societal prosperity relies on harnessing the competitive drive of the hyper-ambitious few who sacrifice everything to build extraordinary things. Disincentivizing this small group with heavy taxes or regulations stifles the innovation that pulls the broader population, including the middle class, forward.

Historically, citizens accepted exceptionally high tax rates when they felt a deep sense of patriotism and belief in their country's greatness. Eroding this national narrative makes unpopular but necessary fiscal policies nearly impossible to implement.

The proposed tax on billionaires' assets isn't about the billionaires themselves, who hold a fraction of national wealth. The real goal is to establish the legal precedent for a private property tax. Once normalized, this mechanism can be extended to the middle class, where the vast majority of assets reside.

Simply engineering high nominal growth while suppressing interest rates only inflates asset prices, worsening inequality. A successful, sustainable deleveraging, as described by Ray Dalio, must also include active redistribution through higher taxes on top earners and corporations to rebalance the economy.

Threatening to confiscate wealth from the most mobile people incentivizes them to leave. This capital flight has already begun in response to the proposal, proving such policies ultimately reduce the state's long-term tax revenue by driving away the very people they aim to tax.

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.