Wealth Taxes and Unintended (But Definitely Foresseable) Consequensces

Watching the proposals being tossed around by political parties, from low threshold and extremely broad (The Greens) to none at all (pretty well anyone to the "right" of Labour), I wonder if other country's experiences of trying to tax wealth are going to be examined, or if we will locally develop the usual kludgeocratic solutions.

Big thing: if you're going to tax something, make sure those being taxed can't simply take it and more somewhere more favourable.

Assets like bonds, equities, and instruments like ETFs are all liquid and easy to move, and precisely that taxpayer response has caused a lot of countries to roll back many of their wealth taxes to property only becasue of the net capital drain over tax taken.

So, that leaves property as the easy-to-assess asset class: niche areas like art and collectables are hell to tax as value is in the eye of the beholder and the disputes would likely cost more than anything collected.

Logically, a capital gains tax on all property but the family home would likely be the most politically palatable solution. The Australians did it - admittedly not that well - and the world did not end for the politicians concerned, which is unfortunately a major consideration.

If accepted, that tax would have to be carefully designed and transparent, with protections against tax reduction strategies like the ability to transfer property 'losses' for use against personal income.

Because the public are now operating in a low trust environment with government, it would also need to be payable only upon the realisation of any gains rather than notional valuations that could be politicised and tweaked for expediency. Citizens would also need to be convinced the money would be used competently, effectively and efficiently. Those last are not strongly in evidence and could provide a huge barrier to acceptance and implementation.

Something to be considered might also be a penalty rate for non-personal-home properties left occupied for no good reason.