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Modeling a Wealth Tax

paulgraham.com

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Re: Modeling a Wealth Tax

#291

Post by [deleted] »

selectodude wrote: post #141
logicchains wrote: post #120

Earlier quoted context omitted.

>What this means is that people arguing against a wealth tax are happy to disadvantage 330m people to protect the wealth of a low number of thousands. By not giving 1% of your wealth to Africa you're disadvantaging a billion people to protect the wealth of one. It's not a disadvantage to someone that they're not getting a part of somebody else's wealth; we're not born with some divine right to other people's money.

The ability to have 100 million dollars is entirely due to the enforcement of laws that we all agree on. I think we should re-frame the wealth tax as guillotine insurance.

[deleted]

Re: Modeling a Wealth Tax

#292

Post by doukdouk »

JoeAltmaier wrote: post #195
drewg123 wrote: post #187

I think a wealth tax sounds good, but the implementation scares me. What I worry about most with a wealth tax is calculating your wealth. Income tax is already hard enough. Now start adding up the value of your stock, your real estate, your personal property, etc. And are you committing tax fraud because you have a million dollar painting that was hanging on your parents wall for decades that you inherited and never…

How about: you're committing fraud if you bury a jar of gold coins in your back yard. What business is it of anyone elses' what you do in your own home? This idea of 'you have something; give it to us!!!' is very disturbing at some level. Its different from other taxes, that tax an interchange with another person or entity. That is supported by society and its mechanisms, for which government (e.g. all of us) have so…

Interestingly, what you see as completely normal (other taxes) was once as disturbing as capital tax seems to be:

> Window tax was a property tax based on the number of windows in a house.

> At that time, many people in Britain opposed income tax, on principle, because the disclosure of personal income represented an unacceptable governmental intrusion into private matters, and a potential threat to personal liberty. In fact the first permanent British income tax was not introduced until 1842 [note by me: not until 1914 in France!], and the issue remained intensely controversial well into the 20th century.

https://en.wikipedia.org/wiki/Window_tax

Re: Modeling a Wealth Tax

#293

Post by [deleted] »

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…

[deleted]

Re: Modeling a Wealth Tax

#294

Post by [deleted] »

LatteLazy wrote: post #153
dx87 wrote: post #68

Earlier quoted context omitted.

That's rarely the case as it is. The majority of wealthy families lose their money in just a few generations if they aren't actively working to maintain it. https://money.com/rich-families-lose-wealth/

Right now, they piss that money away on fast cars and lose . So we could divert that money to pay for infrastructure or cut income taxes or whatever, and aside from fast car dealerships, everyone should be happier.

[deleted]

Re: Modeling a Wealth Tax

#298

Post by mapleshamrock »

logicchains wrote: post #20
paulhart wrote: post #9

Someone 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.

>If you have a bucket of money that isn't doing anything, then what value does it actually bring to the economy Wealthy people don't just leave their money under a mattress, they invest it in something. Even if they just left it in a bank, the bank is still going to lend that money out and invest it. Taxing wealth just encourages riskier investments, as higher risk is needed to achieve comparable post-tax return.

Exactly. Capital gains tax is equivalent to a wealth tax on appreciating assets only, which is the only kind of assets you should be targeting with a wealth tax. So just implement a sensible capital gains tax, and you're done.

Re: Modeling a Wealth Tax

#299

Post by Kapura »

I used to think that Paul Graham was a smart, serious individual, but thinking you can refute a wealth task with high-school arithmetic is such a vast, gross oversimplification of the issues in play that I am starting to reconsider.

Re: Modeling a Wealth Tax

#300

Post by doukdouk »

karl11 wrote: post #163

Incentives are powerful, and typically get the result they are incentivizing in the end. All taxes are a form of incentive, we should always be careful of taxing things that we want more of. If you favor a wealth tax, you are implicitly arguing in favor of incentives to create less wealth. If you tax investment, there will be less investment. If you tax the rewards from great risk taking, there will be less great ris…

An important point here would the magnitude of those effects: how much a 1% wealth tax would reduce wealth creation? Whether it is by .0000001% or by 99%, it would be "incentives to create less wealth" but in the former case it is all but negligible and in the latter case it is a catastrophe.

Capital tax opponents seem to always use the elasticity of wealth creation with respect to the wealth tax rate is extremely high, but I do not remember seeing any evidence on this.

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