Why not have a tax on total net wealth?

We tax income and consumption, but not wealth. A wealth tax, imposed unviversally without exemptions, would seem to me to be simpler and fairer. It would help reducing the gap between the top and lower economic strata. Many wealthy individuals at present quite legitimately pay little tax by careful tax planning. A net asset tax of say 0.5% per annum ($5,000 per $1,000,0000) seem reasonable to me. What are the arguments against doing this?

Official response from Gareth Morgan completed

This will answer your question http://www.top.org.nz/do_these_taxes_exist_overseas_how_do_other_countries_deal_with_this_problem

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Gareth Morgan responded with completed 2016-12-12 10:05:05 +1300
Steve Cox commented 2016-12-11 09:53:33 +1300
Hi William
I’m not ideologically opposed to a Wealth Tax, but …
No exemptions? I suppose it depends from which end you come from.

All assets minus liabilities as the rule would then require you to value not only the obvious house, but artworks, the car, the furniture, your shareholdings, the computer I’m writing this on, and so on. The coffee mug I’m drinking from?

Or from the other end and saying you pay a Wealth Tax on: – land & buildings, investments, artwork, collectibles …

The first method you’re forced into providing an exemption for anything under a certain value otherwise it’s unworkable.
The second method gives exemption to categories not included. Once people learn a category is exempt then you’re at risk of seeing an asset bubble as people move to hide some wealth.
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Tristan Kiddie tagged this with i have the same question 2016-12-10 14:26:43 +1300
William Vernon published this page in Ask a question about policy #1 2016-12-10 13:44:41 +1300