Your state-capitalism solution punishes the firms which successfully adapted, to rescue the firms which were incapable of adapting. This creates substantial moral hazard and is a key reason why state-managed capitalism sees less innovation, and is instead plagued by inefficient zombie firms which make their profits off bailout funds instead of in the market. The scheme rewards the entrenched interests for running fragile operations, while shutting out new competitors who might be better or more resilient.
Mind you, these zombie firms proliferated in Europe after the 2007 crisis, so this is really nothing new. And the good news is that when you do such a thing, you can avoid more disruption. But the bad news is that doesn't leave the economy more resilient when you're done: it leaves it more fragile. In the years ahead, if Europe is further tested by crisis, we may see the real price that her people have paid, and it might very well fall hardest on those who can least afford it.
> Your state-capitalism solution punishes the firms which successfully adapted
That would be true, iff the taxes canceled the gains out entirely. Which... I never said. But that always seems to be the expectation when someone proposes to tax wealthy people. Pandemic or not, I never argue for an effective tax rate close to 100%. But I don't have to. I can argue for the effective tax rates being much, much higher than they are currently, and still stay comfortably far away from 100%. So the incentive to gain more would still be there, it just wouldn't be as strong. Not-so-incidentally, I think that would actually be a good thing.
Mind you, these zombie firms proliferated in Europe after the 2007 crisis, so this is really nothing new. And the good news is that when you do such a thing, you can avoid more disruption. But the bad news is that doesn't leave the economy more resilient when you're done: it leaves it more fragile. In the years ahead, if Europe is further tested by crisis, we may see the real price that her people have paid, and it might very well fall hardest on those who can least afford it.