Taxing already acquired property drastically alters the relationship between citizen and state: we become leaseholders, rather than freeholders, with accumulated taxes over long periods of time eventually “returning” our wealth to the state. It breaches a key principle that has made this country great: the gradual expansion of property ownership and the democratisation of wealth. We need more of this, not less. A wealth tax – like the old window taxes, levied because it was too hard to assess people’s income – is a sign of failure: we can’t raise enough by taxing current economic activity, so we tax again the already taxed fruits of past activity. It is a pre-modern, obsolete concept. Wealth taxes also violate a state’s original mission, to protect the life, liberty and property of citizens.
Although it is an excellent article, I strongly disagree with Heath’s use of the term ‘democratisation of wealth’ rather than, perhaps, ‘widening’ or even ‘diffusion’.
‘Democracy’ is entirely about a state legitimising its use of the means of collective coercion. It is only about ‘wealth’ to the extent that the primary use of the means of collective coercion are to confiscate wealth at gunpoint for assorted pretexts, under the legitimising notion that there is a democratic mandate to do demand-money-with-menaces in any particular instance.