Modeling a Wealth Tax
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Modeling a Wealth Tax
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Re: Modeling a Wealth Tax
#2Equity returns are on average 6% above inflation, so with a wealth tax of below 6% your wealth can still grow year on year indefinitely.
EDIT: Source: https://www.frbsf.org/economic-research/files/wp2017-25.pdf. The precise number is real returns of 6.89% on equity, 7.05% on housing
Re: Modeling a Wealth Tax
#3Are there counter example countries who impose a high wealth tax that have a great startup ecosystem?
Re: Modeling a Wealth Tax
#4What 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: @Applejinx: Wealth exponentially is exactly what I refer to by wealth inequality. Excellent points.
Re: Modeling a Wealth Tax
#5This ignores the fact that everywhere (including countries where wealth taxes are implemented today), there is a floor below which the tax does not kick in.
Re: Modeling a Wealth Tax
#6Barring a constitutional amendment, which is highly unlikely, this will never happen in the USA.
What is more likely, as it’s actually constitutionally legal, is forced realizations of gains to allow for regular income taxation.
Re: Modeling a Wealth Tax
#7Rich man wants even more as poor suffer. News at 10.
Really we should tax land as there is no deadweight loss. I don't agree with taxing wealth creation. He should have articulated an alternative, as the current situation is not sustainable.
Re: Modeling a Wealth Tax
#8Are there counter example countries who impose a high wealth tax that have a great startup ecosystem?
The Netherlands maybe? Our "BOX 3" is effectively a 1.2% wealth tax (30% tax on a 4% assumed return).
The startup ecosystem is pretty good I'd say.
Re: Modeling a Wealth Tax
#9Someone 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.
Re: Modeling a Wealth Tax
#10Barring a constitutional amendment, which is highly unlikely, this will never happen in the USA. What is more likely, as it’s actually constitutionally legal, is forced realizations of gains to allow for regular income taxation.
The Constitution is irrelevant as long as you can get five justices on your side. Most gun laws, the expansive interpretation of the commerce clause, etc., are blatantly unConstitutional, but you can't get five for overturning, so they stand.