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Modeling a Wealth Tax

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Re: Modeling a Wealth Tax

#261

Post by nemo44x »

darkerside wrote: post #237
nemo44x wrote: post #109

Earlier quoted context omitted.

> Wealth tax proposals I've seen don't kick in until $50 million or $100 million. This means that there is a floor on how "poor" the government can make you via a wealth tax. That’s just the starting point. Once people begin to figure out how to avoid it or have been tapped then the qualifier will be lowered to 40m. And then eventually 30m and do on until anyone above average is paying it. And then anyone above media…

Slippery slope is a logical fallacy [0], which you likely already knew. Of course, that doesn't make your argument wrong, just fallible. I think it's arguable that taxes only ever go up. Income taxes on the rich used to be near 90% in the top bracket, so it's not a one way ratchet. That said, I agree government tends to expand and needs to fund that growth somehow. But I think it's much more likely that need manifest…

Sure, nearly every opinion or argument is fallible. I'm not explicitly trying to create a slippery slope or fear monger. A slippery slope tends to lead to unintended consequences. I don't think expanding the net is unintended - I believe it's the deliberate goal. Our history suggests this w/r/t income taxes, etc.

Re: Modeling a Wealth Tax

#262

Post by h4kor »

shin_lao wrote: post #205
barretts wrote: post #33

For a guy who's always railing about the value of honest, rational discourse, he's unbelievably misleading and political in this post. He ignores asset growth and the fact that all the wealth tax proposals have a very high floor for the tax. Saying the government will take 45% of your wealth above $100M is very different than saying the government will take 45% of your wealth.

Asset growth is taxed by capital gains tax.

But not with 100% tax. Your wealth still increases.

Re: Modeling a Wealth Tax

#263

Post by [deleted] »

bhupy wrote: post #125
bitcurious wrote: post #26

I'm highly skeptical of the claim that such tax would discourage startup founders. Wealth tax proposals I've seen don't kick in until $50 million or $100 million. This means that there is a floor on how "poor" the government can make you via a wealth tax. This has two implications: 1. Most "successful" startup founders don't break that threshold of personal wealth. 2. For most startup founders, the startup is the onl…

> money earns money. A conservative drawdown of 3% pay the most commonly proposed wealth tax while still leaving you wealthier at the end of the year. That is only true if your wealth is in diversified ETFs or funds. That is not where most of the wealth of super-rich founders is. If 90+% of your wealth is in a single company (I.e. the one you founded), then there's no guarantee that this wealth will necessarily appre…

[deleted]

Re: Modeling a Wealth Tax

#264

Post by helen___keller »

nemo44x wrote: post #109
bitcurious wrote: post #26

I'm highly skeptical of the claim that such tax would discourage startup founders. Wealth tax proposals I've seen don't kick in until $50 million or $100 million. This means that there is a floor on how "poor" the government can make you via a wealth tax. This has two implications: 1. Most "successful" startup founders don't break that threshold of personal wealth. 2. For most startup founders, the startup is the onl…

> Wealth tax proposals I've seen don't kick in until $50 million or $100 million. This means that there is a floor on how "poor" the government can make you via a wealth tax. That’s just the starting point. Once people begin to figure out how to avoid it or have been tapped then the qualifier will be lowered to 40m. And then eventually 30m and do on until anyone above average is paying it. And then anyone above media…

Not that you're necessarily wrong, but I find it fascinating that the state of social trust is so low in the united states that the most powerful and resonant arguments against potential laws are even if the law is good, a future law in the same vein might go too far and thus even the good law should be shot down.

You can see this on a variety of topics. Gun control legislation, immigration reform, healthcare reform, etc. Reasonable laws are perpetually overshadowed by the boogeyman on the horizon.

Re: Modeling a Wealth Tax

#265

Post by thundergolfer »

BobbyJo wrote: post #194

At what point can we all stop and say the federal government is 'big 'enough'? We can always find more for it to do, but I think most people here will agree the market is better, for most things, than bureaucracy. I'm all for trying different tax strategies to be more fair and efficient, but I think we need a line in the sand we won't cross before we add another potential slope to slide down.

No I don’t think most people would agree with you. Outside of the USA, the idea of leaving healthcare and education and environmental sustainability up to the market is laughable, and scary.

Re: Modeling a Wealth Tax

#266

Post by logicchains »

kpmcc wrote: post #248
nemo44x wrote: post #109

Earlier quoted context omitted.

> Wealth tax proposals I've seen don't kick in until $50 million or $100 million. This means that there is a floor on how "poor" the government can make you via a wealth tax. That’s just the starting point. Once people begin to figure out how to avoid it or have been tapped then the qualifier will be lowered to 40m. And then eventually 30m and do on until anyone above average is paying it. And then anyone above media…

States like the US can just spend in advance without taxing, there’s no necessary relation. We’re not on the gold standard anymore. The point of a tax isn’t to pay for things, it’s to attempt to control inflation and the money supply, and to combat inequality. The idea that a state (read nation, for US states things are different) would become reliant on such a tax to pay for things doesn’t hold water. It may become…

>The point of a tax isn’t to pay for things, it’s to attempt to control inflation and the money supply, and to combat inequality.

A significant proportion of Americans would disagree with you that it's the government's business to "combat inequality". Most people agree with taxes to help the needy and fund infrastructure, but it's a harder sell that the government should punish people just for being too successful.

>Piketty gets into how different rates of capital accumulation create huge rifts between people who own appreciating assets like land and equities and people who don’t who primarily earn wages. The idea behind the wealth tax is to try and narrow the rift.

But he doesn't outline clearly what the problem with this rift is. To quote the criticisms section of the Wiki page on his book (https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...):

"One strand of critique faults Piketty for placing inequality at the center of analysis without any reflection on why it matters.

According to Financial Times columnist Martin Wolf, he merely assumes that inequality matters, but never explains why. He only demonstrates that it exists and how it worsens.[36] Or as his colleague Clive Crook put it: "Aside from its other flaws, Capital in the 21st Century invites readers to believe not just that inequality is important, but that nothing else matters. This book wants you to worry about low growth in the coming decades not because that would mean a slower rise in living standards, but because it might ... worsen inequality."[35] "

Re: Modeling a Wealth Tax

#267

Post by 54mf »

jmcgough wrote: post #178

This is such a straw man argument. No one is proposing something like that - most wealth tax proposals have a floor of like $100m, and a 1% tax seems extremely reasonable when most people can get 4-10% returns just from parking their money in a index fund. I'm of the opinion that no one should have north of $100M. The difference in lifestyle between $100M and $1B isn't going to magically halt entrepreneurship or inno…

Agreed. If someone's barrier to creating a startup is "but when I get unimaginably rich, the government is going to take some of my money!" then good riddance. Take that self-centered, unethical nonsense elsewhere.

Re: Modeling a Wealth Tax

#268

Post by Retric »

bluelu wrote: post #146
thomasdullien wrote: post #93

Perhaps notable: Switzerland has a wealth tax (of up to 0.3%), and there is zero evidence that this has any deterrent effect on wealthy people settling in Switzerland or startups being created in Switzerland. Other features of the tax system more than offset the 0.3% wealth tax. Personally, I am a bit disappointed by the lack of depth of the discourse: Wealth taxes and their effect have been studied quite a bit in ec…

That's not true. In some cantons, the very rich get extra deals, called Lump-sum tax, independently of their revenues. E.g. the Ikea founder only paid around 165000$ in total taxes in 2014 on a fortune of 46.5 billion US $ and all his revenues which he had. Source: https://www.20min.ch/story/so-wenig-steuern-zahlte-der-ikea-... )

That’s often reported but factually incorrect he did not own 100% of Ikea. https://en.wikipedia.org/wiki/Stichting_INGKA_Foundation. That charity was valued at 36 Billion in 2006 and controls most IKEA stores and assets.

The family owned https://en.wikipedia.org/wiki/Interogo_Foundation which was valued at 15B in 2011 which controls IP and collects 3% of revenue from each store.

Re: Modeling a Wealth Tax

#269

Post by anoonmoose »

BobbyJo wrote: post #194

At what point can we all stop and say the federal government is 'big 'enough'? We can always find more for it to do, but I think most people here will agree the market is better, for most things, than bureaucracy. I'm all for trying different tax strategies to be more fair and efficient, but I think we need a line in the sand we won't cross before we add another potential slope to slide down.

Most people here not in the US will tell you that there are two things that are incredibly expensive in the US because they are controlled by the market instead of by the government like they are in almost every other country (healthcare and higher ed).

Re: Modeling a Wealth Tax

#270

Post by doukdouk »

czbond wrote: post #202

Unpopular opinion: Near 50% of American pay ZERO tax whatsoever. The top 10% of all Americans pay 69% of all taxes currently. This is a point 'left out' of current discussions. How about instead of increasing entitlements and stealing more from people that created wealth - we lower the size of the government spending UNTIL it matches where most people pay for the services received in a more scaled manner. https://tax…

> Near 50% of American pay ZERO tax whatsoever

The link you gave says that about 50% of Americans pay zero federal income tax. Are you trying to imply that the only tax in the US is the federal income tax?

Federal income tax brings about 2000 billions USD, US GDP is about 21000 billions USD, and all taxes/GDP is about 25% or about 5250 billions.

Or, in other words, you're overlooking about 2/3 of all taxes.

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