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Modeling a Wealth Tax
681–690 of 1001 posts
Re: Modeling a Wealth Tax
#682Billionaires would still be doing just fine if they were cut in half over 60 years. The point is that right now they are freezing the economy by hiding most of it's energy in their private storehouses. Imagine what we could accomplish if those glaciers of personal wealth were melted down and distributed throughout the rest of the economy.
Re: Modeling a Wealth Tax
#683Re: Modeling a Wealth Tax
#684Perhaps 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…
>See also https://twitter.com/halvarflake/status/1295283922117566464?s.... - I tried to ask @rabois for the source of a claim, and got crickets in return.
Maybe you missed it but he replied to you with this NPR article on Europe's wealth taxes, from which he sourced his comment:
https://www.npr.org/sections/money/2019/02/26/698057356/if-a...
Re: Modeling a Wealth Tax
#685Earlier quoted context omitted.
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 mat…
> Wealth is always eventually taxed when it’s liquidated. For large segments of wealth (real estate) this is untrue. Inherited property receives a step-up in cost basis to the current "fair market value", such that the capital gains liability is removed. You might argue that this is realm of the "Estate Tax", but that is a different topic. https://www.investopedia.com/terms/s/stepupinbasis.asp > if it is never liquid…
> You might argue that this is realm of the "Estate Tax", but that is a different topic.
What? Why? This is pretty squarely in the realm of how to taxa transfer of wealth. The wealth tax is a really ham-fisted way to solve this problem.
> It is not difficult to take extremely large "loans" (loans are not taxed) against assets that you own, in order to avoid actually selling the asset.
Even if one were to take a collateralized loan, it would need to eventually be repaid, and for this to happen, some gain would have to be realized somewhere. That money isn't free. No matter what, that wealth is eventually taxed.
Re: Modeling a Wealth Tax
#686One problem with that analysis is the idea that the wealth isn't going to go up in value. At 5% wealth tax I could see this being a problem. But you should be able to increase the value of a billion dollars pretty easily to offset a 1% tax.
Re: Modeling a Wealth Tax
#687Perhaps 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…
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…
Interestingly, the US is perhaps the only major country that makes capital flight like that in France quite difficult: upon renouncing citizenship, there is essentially an immediate wealth tax imposed.
The US is also the only major country to demand citizens file US income taxes even though they may never visit or earn in the US for the entire year.
Re: Modeling a Wealth Tax
#688Earlier 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.
Not at all. The aristocracy was a legally special class of people based on your ancestors. The end of aristocracy, especially in America, meant for a long list of rags-to-riches stories, and lots of politicians who came from very poor beginnings. The end of aristocracy also meant the end of officers being drawn solely from the aristocracy, which made for a far more effective military, as talent was not related to your parents.
Re: Modeling a Wealth Tax
#689[deleted]
Re: Modeling a Wealth Tax
#690Earlier quoted context omitted.
There's nothing wrong with a tax on non-liquid assets. We already have taxes like that: property tax.
Property taxes are routinely pointed out as examples of highly regressive taxes which cause numerous issues for those who can least afford them.
My point is that there's nothing inherently impossible about a tax based on illiquid, difficult-to-value assets. A tax on wealth > $50M will obviously not be a regressive tax.