Taxation by cumulative income.

If you tax by annual income, then an income of $ 1 million in a year is less efficient than spreading it out over 20 years. And if you ever have a year of very low income, you're creating a tax arbitrage.

And then it becomes complicated to model "How much income do I realize this year vs. waiting for a low-income year to convert to spendable money?" because you have to predict income variations, risk of existing investment positions declining, and lots of other things.

Similar to annual contribution limits on 401ks and such. There's a $ 70k limit per year and if you ever miss a year the opportunity is just gone.

So your marginal tax rate could be based on cumulative income instead of annual income. So it doesn't matter when you earn the $ 1 million: You get taxed the same amount either way. There's still the compounding effect for investments, but for "simple income" you'd always want to earn as much as possible upfront instead of waiting for later. And instead of annual contribution limits, there could be a cumulative limit.

This does make it possible to get rich off something like Dogecoin, spend it all on drugs and booze, and then you're permanently cursed with 50% tax rates as a Wendy's cashier. Or you max out your 401k and then you buy 100% Dogecoin, it goes to $ 0, and you're broke and forever unable to save money again.

But you could also just not do that.

Or, if you must: Instead of "1 year window" and "infinity year window" you do a "7 year window". Or it gets reset on bankruptcy. Or you sell your story to Netflix so everyone can laugh at you but you collect viewership $.

Taxation on cumulative income seems simpler to plan for.