Democratic presidential hopeful Elizabeth Warren dove headfirst into her campaign on Jan. 25 by proposing a new tax on the rich—an area her party has traditionally danced around.

How would it work?

The Massachusetts senator is calling for a 2 percent levy on household wealth in excess of $50 million, and 3 percent on wealth above $1 billion. The annual asset valuations this would require are relatively simple to calculate for bank accounts and publicly traded investments, but much harder...