Core inflation currently stands at ~2.1% according to the BLS. Not sure where you're getting -3% (not that it matters for the sake of this argument, because it could be anything 5 years from now). You're making some great assumptions that everyone with money has it in an S&P index fund. What about the individual who finds herself holding property that used to be worthless but is now in a trendy area? What about the entrepreneur who is completely cash poor but just received an investment valuing their company at $10,000,000? Should he have to sell out to pay Caesar because he's "rich"? There are many scenarios (as in these two easy examples) where wealth taxes represent an upward transfer of money, not a downward as you're proposing.