[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.