The idea of a wealth tax seems to be gaining support as an answer to the eurozone's debt troubles, but the tax will fail to solve its problems, says former International Monetary Fund (IMF) chief economist Kenneth Rogoff.

Even the usually conservative IMF backs the proposal, estimating that a one-time 10 percent tax levy could return the public debt-to-GDP ratios of many European countries back to pre-crisis levels, the Harvard economics professor writes in an article for Project Syndicate.

Its moral case is compelling, he concedes, especially considering today's economic inequality. Plus, if it was temporary, it would be better than increasing marginal tax rates.

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But it has problems, Rogoff argues, saying it would garner less revenue and be more costly to implement than proponents believe.

Political pressures would likely delay implementing the tax, allowing plenty of time of capital flight.

"Italy’s armada of Guardia di Finanza boats would hardly forestall a massive exodus of wealth if Italians see a sizable wealth tax coming," Rogoff comments.

In addition, the wealthy could employ many tax-avoiding tricks, for instance, investing in jewelry and other hard-to-detect assets.

And they might believe the tax would become permanent, as most temporary taxes do, he adds, which would discourage entrepreneurship and lower the savings rate.

Plus, administering the tax would face formidable challenges and raise questions about fairness. For instance, valuing family-owned businesses common in Mediterranean countries would be extremely difficult.

Most economists support broadening the tax base by eliminating special deductions and keeping marginal rates low, he says.

Rogoff advocates a value-added tax and carbon permits or taxes.

"Though such taxes are spectacularly unpopular — perhaps because individuals refuse to admit that the externalities they themselves create are significant — I regard them as an important direction for future policy."

However, rather than reforming or simplifying taxes, most governments are increasing marginal tax rates. Financial institutions are being forced to hold more government debt, a move that ultimately hurts the middle class, elderly pensioners and bank depositors.

Forbes contributor Tim Worstall lambasts the IMF's wealth tax more stridently, calling it a confiscation of wealth that just won't work. Investors would have to sell assets to pay the tax, which would prompt a flood of sales of stocks, bonds and other assets. That will cause asset prices to crash, which would decrease tax revenues.

Plus, the tax would hit average homeowners and people in their 50s and 60s with pensions, he warns.

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