I agree with your sentiments Bart, although I dont think its entirely true that the money saved will almost certainly be invested in the stock market. Many venture capitalists invest in medium size businesses, which in turn provide employment. (I read recently that the majority of jobs is increasingly in the small to medium business sector (<50 employees) something like 60%) I would be in favour of setting aside funding for small loans (to encourage small business). Theres is a such a bank which gives loans in the developing countries (primarily to women) and actually has a very high repayment rate (the name of the bank escapes me) and is quite successful in helping the poorest sege Although usually taxing the rich doesnt work, as they move their money somewhere else.

On another note: In canada, regulation was passed a couple years ago requiring all offshore investments to be declared in income tax returns (which upset a lot of immigrant investors mainly from Hong Kong) Is there a similar requirement in the US?