The most reasonable way I’ve seen so far is to assume that your wealth passively creates x% of extra income for you, and then tax that amount as income.

I can make it simpler yet and close the Billionaire Income Loophole, where their “income” is taking out loans against value of their investments by simply taxing those loans. No need to value something, they’ve already done it when they took out the loan. If you borrowed 10 Million against a portfolio of 50 Million then you should be taxed on the 10 Million. That’s the value you assigned and the benefit you received.

This would also catch the “Buy, Borrow, Die” / Step-Up scheme that the ultra-wealthy use.