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Because there's a profoundly negative impact on investment and economic growth. Maybe the 99% don't see as much direct impact from said growth, but it stopping would still hurt them greatly.

As an aside, what you're describing is not a tax. There's neither a transaction nor any exchange of good or service involved. It's a direct confiscation of wealth, currently unconstitutional, and I'd call it theft. It's not skimming off the top of a transaction, it's literally the feds reaching into your pocket and calling that money theirs because enough other people said it was okay. It doesn't magically become not theft because the thief has a badge or a "democratic mandate" (enough others saying that yes, they do indeed want your money).

I'm not sure that the argument about disincentive is any different from taxing income. We want to encourage both wealth and income, and taxing them does discourage them. But the fact that taxing income discourages people from getting income isn't a strong argument against income taxation altogether.

I'm not American, so the unconstitutional argument doesn't mean much to me. But doesn't the USA have property taxation for land? Wouldn't your arguments apply to the property tax in most states? It's nothing more than the government saying you owe money because you own wealth (in the form of land). Are property taxes theft? Unconstitutional?

Absolutely it's different from taxing income; it demands liquidity. I.e. an entrepreneur with a billion dollars in stock has a net worth made mostly of "paper gains". Very little of that is likely liquid. By letting the money continue to work as an investment, it can keep growing and producing returns. Effectively adding liquidity requirements for private investment would be devastating.

> doesn't the USA have property taxation for land

That's state-level, not federal; the constitution gives the feds no power to confiscate capital. More importantly, it's a direct fifth amendment violation:

> nor shall private property be taken for public use, without just compensation.

Not only is there no enumerated power (enough to make it unconstitutional), there's a specific prohibition.

That said, I'm not a huge property tax fan, either. I'd rather the gov't just bill each citizen for services used as an average, at least at the federal level.

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