Isn't this model naively assuming that you just put the money in the bank (or under your mattress) and don't do anything with it? I'm struggling to see how this

Isn't this model naively assuming that you just put the money in the bank (or under your mattress) and don't do anything with it? I'm struggling to see how this model is a useful contribution to the discussion. Is there some unspoken assumption here such as "startup founder gets wealth-taxed before their stock is liquid"? The "over the next 60 years" part seems to suggest that's not what he's going for here, and you'd expect some special treatment like an 83(b) to cover this case in the illiquid window anyway. Here's how I would model this: the S&P has returned 7% / year (inflation-adjusted) and if you have millions you can invest in higher-yield instruments like hedge funds and startups, so I'd expect a billionaire to be yielding north of that. This more than covers any realistic value of a wealth tax for even the biggest whales like Zuckerberg. For context Warren's plan [1] was 2%/year for wealth above $50m but below $1b, and 6%/year on wealth above $1b, so perhaps worst-case this wealth tax would prevent billionaires from accumulating more wealth through unsophisticated passive income. Founders with "only" $100m would net 5%/year instead of 7%/year of passive income from investing in the S&P. Ok, say you put half in T-bills and dilute your return, even then you're still netting 2.5%/year. Honestly I don't think that's a terrible impact; if billionaires have to beat the market and/or invest their wealth above $1b in more risky assets in order to net a return, that means they will be driving lots of startups and other economic activity. (And remember, you can still invest the sub-$1b portion of your portfolio more conservatively in treasury bonds and whatnot, it's just the wealth above $1b that is taxed aggressively.) I'm fine with a social contract that says "if you happen to win the lottery and earn $1b, you don't get to re-invest that money to make more money and build a dynasty". [1]: https://elizabethwarren.com/plans/ultra-millionaire-tax https://elizabethwarren.com/plans/ultra-millionaire-tax