There are avoidance strategies, but the basic measurement system exists.
A wealth tax tries to reach what the income tax misses: the fortune itself. That is why it is attractive to its supporters. The richest Americans often do not live mainly on salaries. They hold appreciating assets. They borrow against them. They can defer capital gains for years, sometimes until death. A surtax on annual income may miss a billionaire in a low-realization year. A wealth tax would not.
In theory, that is more direct.
In practice, it is much harder.
Publicly traded stock is easy to value. Cash is easy to value. Treasury bonds are easy to value. But large fortunes are rarely so tidy. They include private companies, real estate partnerships, private-equity interests, hedge fund stakes, intellectual property, art, collectibles, trusts, family limited partnerships, restricted shares, and other assets with no daily market price.
A wealth tax would require an annual valuation system for the rich. Taxpayers would argue for discounts. The government would argue for higher values. Appraisers, accountants, and lawyers would become central figures in the tax system. Every major fortune could become a recurring audit.
That does not make a wealth tax impossible. It does make it harder to enforce than a surtax.
It also makes it more legally vulnerable. A federal income surtax fits comfortably within the existing income-tax structure. A federal wealth tax would almost certainly face a constitutional challenge over whether it is a “direct tax” that must be apportioned among the states. Supporters have arguments. Opponents have arguments. The Supreme Court would likely be asked to decide.
For a working government, that matters. A tax that is theoretically elegant but administratively fragile may raise less than promised. A tax that is less complete but easier to collect may do more in the real world.
What Massachusetts proves — and what it does not
Massachusetts has proved that a millionaire’s surtax can raise large sums of money. It has not proved that high-income people never respond to taxes. It has not proved that there is no migration cost. It has not proved that revenue will be equally strong every year.
It has also not proved the opposite. The feared collapse has not appeared. The state did not watch the surtax base vanish. The available migration data do not show a clean millionaire exodus caused by the tax. And the revenue has been too large to dismiss as a political mirage.
The lesson is not that taxes have no consequences. The lesson is that consequences have to be measured, not assumed.
For a national tax, the lesson is sharper. If the goal is to tax very high income, a federal surtax is more enforceable than a wealth tax and less vulnerable to interstate migration than a state surtax. But it would still leave the largest structural problem in the tax code: the ability of very wealthy people to choose when, whether, and how their gains become taxable income.
That is why the real policy choice may not be between doing nothing and imposing a pure wealth tax. A more durable approach would combine a national high-income surtax with stronger rules on capital gains, trusts, pass-through entities, stepped-up basis at death, and IRS enforcement.
The fight would not end. It would move.
At the state level, the symbol of avoidance is the moving van headed south.
At the national level, it is the tax lawyer at the conference table.