The time has come for a real wealth tax. http://www.cosmicweenie.com/wealth_tax.pdf
Modeling a Wealth Tax
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Re: Modeling a Wealth Tax
#42This only models a very foolish version of a wealth tax (i.e. with no lower bound) on very foolish wealthy people (i.e. who don't invest.) Really disappointed by the quality there. It's a straw man of what anyone's suggesting and what anyone's doing.
Re: Modeling a Wealth Tax
#43What percentage of founders experience a liquidity event netting them enough to be impacted by a wealth tax (90% of startups fail [1])? This is arguing against taxing a lottery ticket, while not addressing the issue of existing wealth inequality. “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” ― Ronald Wright EDIT: @Ap…
I think the point is that if you think you have a chance of accumulating wealth (either through founding a start up, or from stock grants from an established tech company), and you have an option of living in a place with a wealth tax or one without a wealth tax, you will very likely choose to live in a place without a wealth tax. Your right, it is a lottery ticket, but if you are going to buy a really expensive lottery ticket, most people won't want to give up a large chunk of the value of that lottery ticket, so they'll start businesses elsewhere.
Whereas some people think the government should tax wealth, this shows that governments are likely to have less tax revenue as people move out of that state/country. Given the recent shift to more remote working, this means that people are less tied to living in a particular place in order to have a certain job.
Re: Modeling a Wealth Tax
#44Wow, this ignores both the "floor" below which you would not be subject to the wealth tax (in the US, most recently by Elizabeth Warren, this has been discussed as $50M+), and ALSO fails to take into account that you would be growing your principal at ~3-8% a year through investment, etc. Sure, I guess with no floor on the tax and with your money just literally sitting in a pile, the government would eventually take…
Also, inflation currently does the modeled loss at 1-2% already without a floor. Wealthy people are still fine.
Re: Modeling a Wealth Tax
#45Someone forgot to model growth in the value of the asset, and/or putting the wealth to use. A wealth tax is, to an approximation, the equivalent of the "management fee" that an ETF charges, but with the revenues going to the government. If you have a bucket of money that isn't doing anything, then what value does it actually bring to the economy? Penalizing static value seems almost reasonable.
But a wealth tax also targets owners of assets that don’t appreciate. It taxes both the winners and the losers, and for the latter it’s nothing but a forced divestiture of their ownership stake.
A capital gains tax, on the other hand, strictly targets those whose assets have appreciated in value.
Wealth is always eventually taxed when it’s liquidated. And if it is never liquidated, then it arguably doesn’t really matter.
Re: Modeling a Wealth Tax
#46this assumes the weakest possible form of a wealth tax.
a progressive wealth tax would tax the increase of wealth on the margin rather than just "wealth". experience equity gains of $1M? you owe an extra $10k in liquid cash at the end of the year. if your equity doesn't grow, you don't get taxed.
in any event, the floor for these kinds of laws would likely be above the ceiling of most people's lifetime wealth accumulation.
Re: Modeling a Wealth Tax
#47"[T]he government will over the course of your life take 45% of your stock" seems a bit misleading? You can either retain ownership and increase your compensation (which is more expensive) or sell your shares to someone else and pay the government with the proceeds. Makes it sound less like the government wants to take over private companies and instead incentivize dilution of stock ownership.
Re: Modeling a Wealth Tax
#48Thomas Piketty's Capital in the Twenty-First Century advocates for a wealth tax of up to 2%. This is the only remedy to combat the structural rising inequality in capitalism.
He also admits the tax would be difficult to implement. He should know. France wealth tax has existed for more than 30 years. It was not a success, in part because the wealthy found ways to avoid it. It was as simple as moving residence to Belgium. The tax has now been turned into a property tax.
Re: Modeling a Wealth Tax
#49What we need is inheritance tax. If you've made money, you can keep it. But you can't live for free just because some guy 100 years ago made money and you won the genetic lottery.
Isnt there a loophole that you transfer all the money to a foundation and then your children control the foundation effectively getting the money but on the books they did not inherit the money.
Re: Modeling a Wealth Tax
#50Oh boy. HN eats pg alive.
Are there any forums like HN that aren't backed/funded by a VC firm/incubator/whatever? I forget why everyone migrated from /., as a lot of memes and dumbspeak from there appeared on here over the years.