[yibg]

Taxes aren't just there to provide an income stream to the government. It's also a mechanism to guide behavior via incentives (or punishment). Right or wrong there we're providing an incentive to hold assets longer, or use less fuel or buy from domestic producers etc.

[claytongulick]

IIRC, this was one of the main arguments for the Articles of Confederacy, the states were pretty nervous about this exact situation.

This was reaffirmed by Marshall [1] with the famous “the power to tax involves the power to destroy."

[1] https://www.archives.gov/milestone-documents/mcculloch-v-mar...