what is the downside of a wealth tax 
a wealth tax is difficult to administer tends to encourage tax evasion and has the potential to drive the wealthy away from countries that enforce it these caveats coupled with debates about how to implement it fairly perhaps explain why so few countries in the world impose such a tax on their residents the bottom linea wealth tax is a levy on the total value of a person s assets as opposed to taxes on their income real estate or asset sales wealth taxes have been implemented in some european countries and proposed by u s politicians as a way of moderating extreme wealth inequality 