&gt; A wealth tax, however, would shift the tax burden more onto the less active wealth holder. This, in turn, would give him a lower rate of return, and capital would shift to the more active individual. In other words, the redistribution would be a reallocation to more productive means. As the authors point out, however, this would also mean an increase in wealth inequality.<p>Interesting to think about the social and economic consequences of this kind of change. Charities would probably be less capable of operating in perpetuity on endowments, individuals would no longer be able to invest their wealth and live off the rent. The economic status of all individuals within the upper and upper-middle classes would in effect be constantly sinking, and they&#x27;d be expected to make their way on their merits within the market economy. Money would be reallocated towards people who could do more with it. It would be a shift towards a world with a much more cut-throat, highly meritocratic, highly competitive model of capitalism.<p>It also introduces nuance into the debate around Thomas Pikkerty, you&#x27;re not just talking about capital growth, but also about passive and active investment. I doubt many people defend the passive growth of capital over and above the general growth of the general economy. If you really can put your money in property, or in an index fund, and with very low risk grow your wealth at a rate higher than the rest of the economy, that is clearly a problem - it is an economic tendency towards aristocracy. But if you&#x27;re creating a system where passive capital is falling away, and the funds flowing in each generation towards people who can deploy the capital most effectively, that is a different moral issue, and a different trajectory for the future of the economy, and society.