The unit of account for tax is the currency of the relevant sovereign. Most contracts for income are denominated in that unit of account, even if it is not there is often a highly liquid market (FX) between units of account.
Most wealth is not stored in assets where the unit of account is that of the sovereign. This counts double for assets with a physical location.
This isn't something that can be easily hand-waived away.
My understanding is that you say that taxing things denominated in a foreign currency is difficult? But why? I already pay taxes on my capital gains denominated in a foreign currency (for example dollars). There are official government exchange rates for tax reasons, published daily. I don't see anything to hand wave here, because there's no problem.
It's too easy for people to offer hypothetical prices they'll never have to execute on. You could establish a price by forcing people to sell anything to the highest bidder, but that kinda explodes any conventional idea of property, and now the government is spending all its time running a trillion sketchy auctions while no human has time to do productive work anymore because your neighbor is trying to buy your car for $1 and you need to arrange a more-plausible offer before you lose it.
The point I'm trying to make is that assets such as land are not denominated in any currency and typically end up being held for such large amounts of time with such substantial transaction costs that's there would be a large cost involved in knowing what the value of the thing being taxed is.
If I pay you $100k, £100k or ¥100k we can use spot rates to work out how many € that is within much less than 1%.
If I own a piece of land how would you answer the question, "what should the value for taxation be?"
If you go with the last transaction price then this will have a substantial impact on properties that haven't been sold for a long time and encourage people to enter into transactions that look like sales but aren't (such a 999-year lease).
Leave it up to a government agency to decide and this agency will come under huge pressure to favour one type of activity over another. How do you value land owned by the government? What if that land is privatised? The UK's attempts to deal with this when it privatised BT completely destroyed the fibre to the premises industry in the UK for years.
I completely agree you then. I think people arguing for wealth tax severely underestimate how many edge cases and loopholes there are.
And that's just the legal version.
I know someone who used to work as a business lawyer. She spent years trying to track down the true owners in various cases. At the very least it's an expensive business. And sometimes it just couldn't be done.
Of course governments can cut the knot with physical assets, walk into a building with troops and/or police, and say "This is ours now." Or they can order banks to hand over the money in accounts.
But before they can do that, there has to be some certainty about the owner. And even getting part way there can take a while and cost a lot.
The real problem has always been measuring "current wealth" with accuracy, fairness, and not spending more than you collect on an army of auditors.
I don't see how "flat" makes anything easier, since it's a downstream calculation.
Distribution of wealth is about the distribution of real resources, especially control over human labor. And that underlying thing can always be taxed, optimized, or even repurposed to better serve the needs of society.
I find this argument somewhat unconvincing. Where is most of the wealth? In hard assets, such as real estate and financial assets, such as stocks and bonds. The former are very difficult to hide, for obvious reasons. As for the latter, the ownership of every single share is recorded in large databases (e.g. DTCC, Clearstream and Euroclear). In that sense, the "physical location" of most of the wealth is well known, so in theory it should really not be difficult to tax it.