Why would I bother investing money at all then? You can expect an annual return of around 7% on the stock market, subtract 4% wealth tax and 2% inflation and you're left with nothing in real terms.
Everyone (even the super-wealthy) would spend all of their income as soon as they earn it. Sounds great ("imagine all the production it would stimulate!") until you realize that no one is making capital investments. Factories rot, infrastructure decays, and innovation stops.
If you have wealth right now, you have two options:
Sit on it
Invest it
Currently, if you invest it you are penalised by income and capital gains taxes in excess of 20%. Under my proposal, you are taxed at 3% for investing.
With current schemes you are only "penalized" for capital gains when you actually have them. If you buy an item for $100, and sell it ten years later for $110 then you pay taxes on the difference. With your scheme you would have spent $40 in taxes in the mean time.
Additionally with current schemes you can balance losses against gains (rules vary by country) and you aren't penalized for investing: eg money put into a factory doesn't incur taxes until it starts producing returns.
Depends on the item. For example a car or a house also provides utility which is value extracted and not a loss. Most items should appreciate in line with inflation, all else being equal - after all inflation doesn't change real values, just the digits used to express that value.
And in this example if I sold it for $100 then no tax would be due at all under current schemes. In your case I still have paid $40 in taxes in addition to the losses from inflation.
Everyone (even the super-wealthy) would spend all of their income as soon as they earn it. Sounds great ("imagine all the production it would stimulate!") until you realize that no one is making capital investments. Factories rot, infrastructure decays, and innovation stops.