Looking at Taxing the Ultra-RIch

I am not in favor of having lots of ultra-rich people around. Really, once you've got enough in the bank to retire twenty times over, I think you should -- and get out of the way of others who haven't gotten there yet. 

That aside, which is more deserving of being taxed:

(1) A man whose net worth is a trillion dollars, but actual disposable income is only a million a year, but operates ten or so companies employing 50,000 people?

(2) A man whose net worth is only a hundred million, but whose disposable income is only a million a year, a significant portion of which is made through investments that he made after being elected to or appointed to some political office some twenty years ago?

(2A) Does it make a difference if person (2) persistently votes to be liberal with tax money, but not his own?

For the record, this hypothetical does not match anyone in particular.

To make this a little more concrete, say the proposed tax is a one-shot 5% net worth tax.

Let's calculate the taxes on (1):

5% of $1,000,000,000 would be fifty million dollars.

Is it clear that he doesn't have enough disposable income to pay that? 

He would have to sell off a bunch of stock, likely resulting in companies being taken over in hostile transactions, to be drained dry for somebody else's profit, before being shut down. 

Now, let's calculate the taxes on (2):

5% of 100,000,000 is five million dollars. 

Is it clear that he also doesn't have enough disposable income to pay that with a year's wages?

He would also have to sell off some stock.

But that stock isn't likely to be the controlling stock for some company that employs thousands of people.

It would still make waves in the stock market. 

In point of fact, with a whole bunch of rich people being put in the position of having to sell off, short-selling investors are going to push the prices down, punishing both (1) and (2), as well as the market in general.

But the real answer is that we don't have enough information to know which of the above is more worthy of being taxed, unless our answer is that the punishment to the market indicates that neither of them should be suddenly hit by a tax, and that five percent sounds small but isn't.

(2) may need to be kicked out of office. Or not. Depends on lots of things.

(1) may need to retire and turn things over to a new generation. Or not. Depends on lots of things.

The other real answer is that taxes are stupid. We should not be depending on the government to do our good deeds for us.