I suppose market valuation declines could be carried forward in order to offset future market valuation increases. In the event there is a large cap company non publicly traded, its wealth growth could be assessed on the basis of its book value. If a large publicly traded company lacks the funds to pay a wealth tax, it could sell more stock to acquire this needed capital to pay its tax obligations. If a non publicly company does not have enough cash on hand to pay a modest 2 percent wealth growth tax, I suppose it could either liquid a small fraction of its assets or get a bank loan to pay its tax obligations.
Edited: Here is a very informative short article with regards to Why the U.S. needs a corporate wealth tax.
Why the U.S. needs a corporate wealth tax
Looking at the link it starts off with....
"For years, many corporations have abdicated their civic duties and
have paid little or no tax. There are
several reasons for this phenomenon: globalization enables corporations to assign profits to low-tax offshore jurisdictions; the Tax Code provides robust write-offs for capital expenditures; and adroit advisors devise clever strategies that enable corporations to navigate around otherwise onerous tax burdens. The combination of these factors has greatly eroded the corporate tax base."
It signals some problems.
- Depreciable capital expenditures must be expensed in some manner, eg, Schedule 179, depreciated over time. Without
this, income would be inflated by not recognizing costs.
- It ignores a prominent reason some corporations don't
pay income taxes in some years, ie, no profit.
- There's no analysis of the claimed tax situations.
- It ignores taxes that corporations pay even when they
don't pay income tax, eg, property tax. Note also that
their property taxes aren't discounted, as are primary
residences. Also they pay property taxes not only on
real estate, but also on machinery, furniture, etc.
- It doesn't fully address the possible incentives &
effects on the corporation's behavior.
- It addresses only companies with the corporate
form of ownership.
- It doesn't address the government sham of collecting
tax on the increase in value based upon dollars...but
those dollars fall in value every year, so some portion
of that value rise is not economic, ie, it's just more
dollars representing the same value.
A wealth tax could be workable...offsetting the alternative
of increasing the income tax. But bear in mind that
corporations are already doubly taxed, ie, the company
pays tax on income, & from the remaining money, the
shareholders receive dividends upon which they pay
income tax.