Saez wealth tax won't reduce capital tax because of foreign savers

A potential concern with wealth taxation is that by reducing large fortunes, it may reduce the capital stock in the economy—thus lowering the productivity of U.S. workers and their wages

However, these effects are likely to be minimal in the case of a progressive wealth tax for two reasons. First, the United States is an open economy and a large fraction of U.S. saving is invested abroad while a large fraction of U.S. domestic investment is financed by foreign saving. Therefore, a reduction in U.S. savings does not necessarily translate into a large reduction in the capital stock used in the United States. In the extreme case of a small open economy model, a reduction in U.S. saving has no effect on U.S. investment (it’s fully offset by an increase in foreign investments in the United States).