[philipallstar]

But when you liquidate assets you... pay tax! Capital gains tax. So you liquidate, pay capital gains, and use the proceeds to pay a wealth tax?

[SoftTalker]

In the contrived example, the 5% return was "risk free" so assume it was something like CDs, no capital gains.

[golem14]

CDs generate interest, which is taxed as income, higher than capital gains. Just sayin ...

[SoftTalker]

Right, but you don't trigger additional taxable income by redeeming them to pay your wealth tax, unlike e.g. selling stock shares.