Valuing assets is difficult. Doing it every year would be infeasible. Doing it at the point when someone dies and their estate is distributed is much easier. In a lot of cases assets will be auctioned off anyway so you get a valuation for free.
(But there must be a lot of cases in which someone sells for a large sum of money a work of art or a copyright that they inherited and people then think: Hang on, was the value of that thing taken account of when the estate was distributed? Should additional inheritance tax be applied now, even though X years have passed and we really can't guess what the value would have been at auction X years ago?)
Is it though?
- land and real estate (commercial and residential): already valued and taxed annually !
- company stock is re-valued on a regular basis as part of the audit process.
- commodities like gold etc - easy
- possessions like art, boats etc - small % of wealth except in the most expensive items, which can be appraised every few years, just like real estate.
If the government were to start taxing people on the value of their assets you can be quite sure that within a year or so most rich people would have their assets in a form that makes it much harder to value them.
But there's a problem also for ordinary people, who have most of their assets in the form of their house. In the UK land isn't valued annually.* Unless your house is very similar to a nearby one that was sold recently, nobody really knows what it's worth. Speculation concerning what development might be permitted in the future can have a big influence on the value. It would be scary if some bureaucrat's guess were to significantly affect one's annual tax bill. And it would be expensive for everyone if that resulted in disputes going to court.
* Local taxation is based on the "rateable value" of property, but this is inaccurate, banded, often out-of-date, and only a small part of a typical family's total outgoings.
> If the government were to start taxing people on the value of their assets you can be quite sure that within a year or so most rich people would have their assets in a form that makes it much harder to value them.
Switzerland, which tends to be viewed as a haven for the rich, has a wealth tax. It would appear to be a counterexample...
Note that it has other tax features which may make it appealing to the rich (no capital gains tax, e.g.).
In the Netherlands, there is an asset tax. Your assets (money, stocks, bonds, etc.) over a certain threshold are taxed 30% annually on an assumed investment gain of 4%, so effectively a 1.2% tax on everything over a threshold of a couple ten thousand euros.
I think the numbers are different this year, but nonetheless it certainly isn't infeasible.
(But there must be a lot of cases in which someone sells for a large sum of money a work of art or a copyright that they inherited and people then think: Hang on, was the value of that thing taken account of when the estate was distributed? Should additional inheritance tax be applied now, even though X years have passed and we really can't guess what the value would have been at auction X years ago?)