Consider the case of a farmer whose net worth, in terms of the value of the land they own, is fairly high, but whose annual income is pretty low. This is typical of many family farms.
Similarly, a widow with significant equity in the house she and her husband owned for forty years, now living on small retirement income.
How about a thirty year old banker who makes a high salary for managing a portfolio of derivatives or some such, whose net worth is zero or even negative because he's in a big house with a big mortgage and little equity, and the rest of his income goes into car payments on a car he can't really afford, country club dues, fancy dinners, maybe cocaine, etc. This is a lot more common that you'd think.
How about someone who has been diligently socking away as much as they could save each month, living frugally but paying off a mortgage, investing in some rental property, etc.. They're the "millionaire next door" you hear about. They spend very little, and don't necessarily have much income, but they're well-prepared to weather an economic downturn, to pay for their own retirement, and to leave something to their kids, because of the net worth they've accumulated.
What about assets that are hard to assign objective values to, like jewelry and artwork? Would there be official IRS appraisers who get to decide what that piece by German Expressionist painter Heinrich Campendonk you bought a few years back is worth today? What about assets that are leased, rather than owned? (Or would you tax those assets at the corporation level?)
I think it would be a mess, impossible to define fairly, a goldmine for lawyers and accountants who create complicated ownership structures to get around whatever definitions are used, and in some ways completely backwards in terms of what behaviors it rewards with low taxes and what it punishes with high taxes. Oh, and it gives the government a greater incentive to track down and monitor ownership of precious metals, and to make unreported ownership of gold and silver a tax evasion crime.
Just for starters.
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