Taxes on wealth or simply wealth tax is the tax levied on the value of wealth owned by a person. As the term wealth carries with it a broader meaning, generally capital transfer taxes (which include inheritance tax and gift tax), property tax, and capital gains taxes are some times invariably referred to as wealth taxes.
Taxes on wealth were first introduced in Europe, aimed at reducing the growing wealth gap between the rich and the poor. It was meant to raise revenue for addressing pressing social requirements and also to discourage the attitude towards amassing wealth.
Still, in countries across the world, majority of wealth is concentrated at the hands of fairly small number of people. Ideally taxes on wealth cuts down the disparities in wealth rather than the income, which actually is the determinant factor on how the scales are weighed for the next generations.
Also, taxes on wealth can bring about vertical as well as horizontal equity, which income tax fails to achieve. For example, neither a wealthy person nor a poor one with no income will pay income tax. But the wealthy ones need to cough up wealth tax while the poor need not.
But, as...
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