[deleted]
Modeling a Wealth Tax
481–490 of 1001 posts
Re: Modeling a Wealth Tax
#482Earlier quoted context omitted.
I'm not sure european examples are a great comparison. First, most european wealth taxes (including recently defunct ones) have much lower floors than US proposals. $1m instead of $100m. That changes a lot. France did experience "capital flight," famously Gerard Depardieu. Second, "capital flight" has always been present in Europe. There's a long history of it, and practical realities make it relevant. I do agree abo…
The question if billionaires are bad for society is pretty much the same question as asking if the aristocracy was bad for previous societies. The existence of billionaires clearly undermines the core principles of democracy which is that all people have essentially the same political power. The existence of many laws which clearly aim to benefit billionaires only is enough evidence that this power balance does not e…
> The question if billionaires are bad for society is pretty much the same question as asking if the aristocracy was bad for previous societies.
Are you comparing billionaires of today, with dictatorships and monarchies of yesterday? Where people can be killed, jailed, sent to work camps, etc. at will? Are people today working for "the man" essentially indentured servants?
> The existence of billionaires clearly undermines the core principles of democracy which is that all people have essentially the same political power.
I don't think this is a core principal. Every person should have the same voting power, and the laws should apply to everyone equally. But the president and representatives clearly have much more political power than any average citizen.
> Essentially strong wealth imbalance leads to unstable societies.
This is a big claim, and would have to show some sort of evidence to support it.
Re: Modeling a Wealth Tax
#483What I want is a tax on wealth gain, even unmaterialized, with a floor based on what you've previously paid. Essentially a capital gains tax as it is implemented in most developed countries but applied to unrealized gains as well. So if your wealth goes from $60m to $100m I want the tax to apply to the $40m delta. If the next year you lose $20m, then make it back the following year, no tax applied. I also want it to…
> applied to unrealized gains as well
so it will also apply to unrealized losses too then? Or is it a one way street where paper gains are taxed as tho it is realized, but paper losses can't be offset?
Re: Modeling a Wealth Tax
#484Perhaps 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…
You're cherry picking. France imposed a wealth tax and they repealed it. "At least 10,000 wealthy people left the country to avoid paying the tax; most moved to neighboring Belgium" https://www.bloomberg.com/opinion/articles/2019-11-14/france...
you pay income tax (and presumably any wealth tax) no matter where you move to as a US citizen unlike most countries.
Re: Modeling a Wealth Tax
#485Earlier quoted context omitted.
Here in India Switzerland is mainly famous for their bank accounts where all the corrupt politicians store their ill gained wealth. Everyone here knows the phrase "swiss bank". wondering if 0.3% a good tradeoff for secrecy?
1) Banking secrecy in Switzerland isn't what it was: https://en.wikipedia.org/wiki/Banking_in_Switzerland#Banking... 2) The Swiss wealth tax is only charged on Swiss tax residents, so corrupt politicians who stash their money there won't be paying it unless they are Swiss resident (which is pretty unlikely).
Ah that explains why "swiss bank" stopped being a synonym for corrupt politician over the last decade or so. It used be, when i was growing up.
Re: Modeling a Wealth Tax
#486Earlier 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…
exactly. Also money printing will mean that 50 mil in 10 years is more like 10 mil now. Personally, this and income tax increases make me seriously consider moving out of CA (where I’ve been a resident for a very long time)
You shouldn't even need to consider those two points - just leave that miserable state.
Re: Modeling a Wealth Tax
#487Earlier quoted context omitted.
I'm not sure european examples are a great comparison. First, most european wealth taxes (including recently defunct ones) have much lower floors than US proposals. $1m instead of $100m. That changes a lot. France did experience "capital flight," famously Gerard Depardieu. Second, "capital flight" has always been present in Europe. There's a long history of it, and practical realities make it relevant. I do agree abo…
Think about how hard Founders work to efficiently divide up the equity pool of their company in order to entice and retain top talent. Consider that the State and Federal government is already a silent partner to the tune of ~20% of the company profits, and then again ~20% on capital gains. Every little bit more carved out for the government is just reducing the portion left which has to justify the risk/return propo…
> and while the government might take your last 409a valuation as the means to valuing your net worth, they aren't accepting your shares as payment, only cold hard cash.
There aren't any wealth taxes of this nature on the books in the US, so assuming that they will only take cash and not shares is premature.
But I think you raise a good point that payment in shares is far more tenable, and likely probably, for highly illiquid economic assets.
Re: Modeling a Wealth Tax
#488Makes you appreciate the other side of tech icons so much more. Bezos, Gates, Jobs did/do not promote themselves as philosopher kings.
Just sad to watch.
Who in tech started this? Was it pg or were the open source manifestos from Eric Raymond et al the precursor?
The a16z content factory is same thing. Nauseating.
Re: Modeling a Wealth Tax
#489The only purpose of a wealth tax is so that the wealthy have less money. That's it. It serves no other purpose.
Because as we know from Modern Money Theory, taxes are about releasing real resources. Government has no need of taxes financially. You need taxes in a society in the same way you need garbage collection in a program. So you can release real stuff to maintain the virtual abstraction.
Billionaires tend not to have a hoard of nurses in their garages. It's usually Bugattis.
If there is any unemployment then we are overtaxed for the size of government we have.
Look after the unemployment via a Job Guarantee, auto stabilising the price of labour in the economy, and market competition will then sort out the billionaires automatically.
In the economy a bottom up design beats a top down.
Re: Modeling a Wealth Tax
#490Perhaps 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…
The first thing to notice about a wealth tax is how little it fundamentally differs from an income tax on investment income. If you have a billion dollars and you get a 2% return and pay 15% capital gains tax, you paid 0.3% of your wealth in tax. So then what's the difference? For one, it pushes people towards riskier investments. At a 1% annual return, a 0.3% wealth tax is equivalent to a 30% income tax. At a 5% ann…
It seems like, if you wanted to help stop the wealthy from ducking paying taxes, one should just stop providing a special long term capitol gains tax and tax capitol gains the same as income. It simplifies the tax code, stops punishing workers who receive a wage over those who earn investment income, and doesn't require a bunch of new accounting to implement. My cynicism hat tells me the reason it isn't the policy goal is that it could actually pass in the US, the wealth tax likely never will.