Right now the main issue between Republicans and Democrats on the fiscal cliff negotiations is raising the maximum tax on regular income from 35% to 39%. Obama is on record as having agreed that it made no difference to him if it were done by closing loopholes but now insists it has to be an adjustment in the rate. This was a key election promise by him. OK, on the other side Representatives have signed pledges of "No New Taxes," like this was a marriage vow. But IMHO, the issue is a farce, as very little revenue will be gained by this change. The rich will just take a few minutes with their accountants and find a way to circumvent the new higher taxes. And it isn't that much money anyway. Former President Clinton called it all Kabuki.
To explain, let's take Warren Buffet. He is worth about $500 billion, but pays himself a salary of $100,000. per year to circumvent paying taxes. He, as well as many such like him, take most of their income at the 15% tax rate on capital gains. So on his $100K salary, lets just assume that all of it is taxable at 35%. This means that he pays $35K in taxes now. If the rate goes to 39% he will pay $39K in taxes. So we are willing to destroy our economy and go over a fiscal cliff so we can get an extra $4K from Warren Buffet. You have to be kidding!
Now you may say, "Let's raise the capital gains tax," but the name of our system of economic activity is capitalism and capital is vital to the creation of jobs. So that's probably a bad place to raise income in a poor economy. Also, traditionally, the capital gains rate has been just one rate, not progressive as are other taxes. Most American have some form of investment, directly or indirectly.
A far better solution is to tax wealth. Right now real estate property is taxed quite heavily and is used to provide social services at many levels. The taxing of real estate has a high level of acceptance and is neutral as to people. It works. But there is also intangible property (everything that is not real estate) with is seldom taxed except in a few states. So why not tax it? It is easy to find and calculate as most intangible property has a paper ownership basis.
If there were a 2% intangible property tax on the very, very rich and a 1% tax on the not-so-rich-but-well-off the country could gain a lot of income. Buffet could be paying $10 billion in annual taxes on his $500 billion in holdings if it all were in non real estate holdings. Now that is tax worth going to battle over and could do some good in paying the bills. There will be some who try various dodges to evade the tax and the IRS should be meticulous in challenging cheaters.
To prevent the rich from moving money off-shore, I would also have a 50% one time tax on any money leaving the US, that was made here. Everyone required to pay this new intelligible income tax would have to account for every penny in their change in net worth from year to year and if net worth goes down without an explanation the 50% tax would be applied automatically.