The vast majority of wealth is not traded on a liquid market like the S&P. Your scheme only works in nice divisible liquid assets.
Otherwise, when do you expect the government to actually realize its gains? If I have a house I intend to live in until I die and the govt take 2% of my stake away each year, when would it be allowed to force a sale to realize it?
Do I just lose my house once it has a majority stake? Does it just wait until I die? If it does, how is this better than an inheritance tax that is significantly easier to implement?
Otherwise, when do you expect the government to actually realize its gains? If I have a house I intend to live in until I die and the govt take 2% of my stake away each year, when would it be allowed to force a sale to realize it?
Do I just lose my house once it has a majority stake? Does it just wait until I die? If it does, how is this better than an inheritance tax that is significantly easier to implement?