For the sake of completeness. Top capital gains rate is 20% + 3.8% medicare surcharge + state tax. In a high tax state like California, you're paying 37.1% on i

For the sake of completeness. Top capital gains rate is 20% + 3.8% medicare surcharge + state tax. In a high tax state like California, you're paying 37.1% on investment income, not 15%. Also, top federal rate is 39.6%, not 35%, plus state income tax, you can pay as high as a statutory rate of 52.9% in CA, or around 47% after deductions. And more to your point, we already have a defacto wealth tax in the US because inflation is not deductible. If you hold a bond paying 2% per year, and inflation is also 2% per year, you pay tax on those gains even though you've made a post-tax loss in purchasing power. At 2% long term inflation, the defacto wealth tax works out to be the 2% multiplied by your capital gains rate, or from 0.47% to 0.74% for high earners depending on what state they live in.