Gyroscopic Investing

Pointed stick, currently you could hold a painting for fifty years and then sell it. The amount of say medical care or computing power you could buy with the picture sale would be entirely dependent on what had happened over the intervening fifty years. You would benefit from improvements in computing technology or medicine even though you had done nothing whatsoever to facilitate them. There is nothing wrong with that but it is a free lunch IMO. From my perspective given that tax needs to be paid, taxing that "free lunch" is the most appropriate way.
I think it is much better to tax assets than realized capital gains because unrealized capital gains represent just as much of an imposition on the economy as realized. By holding wealth in a painting you are choosing not to deploy it in some other way (eg developing a new medicine). After a lifetime of that why should you be just as financially empowered to claim the latest medicines or whatever as someone who didn't own a painting and instead ploughed money into developing new technology?

pointed stick

The entire economy would be subject to immense uncertainty as people re-arranged their assets to minimize their market price, impoverishing everyone in the process.

Far from impoverishing everyone, I think that that would amount to rational asset pricing. Assets would be priced so as to maximize prospective yield. If an asset was cheap then it would be viewed as an attractive buy. To me that makes much more sense than our current "greater fool" propensity to find assets more attractive as they get more expensive.

Out of curiosity, are there any assets that you find it a positive thing when they increase in value?

Pointedstick wrote: Out of curiosity, are there any assets that you find it a positive thing when they increase in value?

I'm not sure I follow your meaning. Obviously it is great that we become better organised, with improved knowledge, technology and infrastructure. That means a greater value of capital relative to anyone's man-power I guess. So the overall value of global assets ought hopefully to increase I guess. I'd much rather that then we descend into disorder and inefficiency. Is that what you are on about?

I think it is right that everyone looks after their own money as best as possible. All I'm saying is that the overall system needs to be such that in so doing we also inadvertantly do what is best for the overall economy. Isn't that what everyone wants?

IMO its the job of government to make sure that what is best for money also happens to be what is best for the overall economy.

We seem to have got it backwards such that we think the finance system should evolve into being more susceptible to gaming of the system- creating duplicate claims over the same underlying real wealth and such like.