Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea • Hacker News Board

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#321

Post by mrmuagi » Thu, Oct 22, 2020, 6:50 PM UTC

throwaway2245 wrote: post #265

sempron64 wrote: post #125

I'm not wealthy enough for a wealth tax to apply, but a wealth tax is a colossal privacy and administrative burden on _every single taxpayer_. Assets must be accounted for when calculating wealth, so the tax service will be required to track and value assets including vehicles, homes, and material good etc. for every citizen to see if the wealth tax would apply to them -- if we didn't report material goods, the wealt…

I do pay a wealth tax in Europe. It's fine. Claims here that it is impractical are overstated. Income tax is already an administrative burden on every single taxpayer, and it works fine. Do you imagine that people don't already track and value their vehicles and homes and other high value material wealth? That strikes me as unusual.

I don't think that matches reality. Wealth tax is supposedly for the rich, people with high assets already -- not the everyday taxpayer. Getting Joe or Susan to itemize their assets and report it yearly (including depreciation) seems like a lot of extra work -- albeit perhaps you already have to do this for insurance purposes for some house items, not sure, I am Canadian.

I just did some quick research and it looks like the tax failed in Europe [0]. Thousands of millionaires in France just left the country and eventually it was just axed and declared a failure.

Which seems interesting -- the measure of success of a wealth tax seems to be how many rich people stay.

[0] https://www.npr.org/sections/money/2019/02/26/698057356/if-a...

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#322

Post by rayiner » Thu, Oct 22, 2020, 6:50 PM UTC

tonystubblebine wrote: post #6

As a business owner, when taxes are low, I see that as an incentive to pocket profits. But when taxes are high, I see that as an incentive to hide the profits by investing in the future. I know this isn't always the case with everyone. And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them. But this incentive is so blatantly obv…

That's actually an example of why wealth taxes aren't a great idea. If you invest money back into the business, that might reduce your profits, and therefore any corporate or income taxes. But that investment it will increase the long-term value of the company. Under a wealth tax, that would cause taxes for everyone who holds the stock to go up! In fact, if investing in say a new line of business causes the value of the stock to go up by more than just parking the money in the corporate treasury, a wealth tax creates a perverse incentive to not invest back in the company.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#323

Post by ultrarunner » Thu, Oct 22, 2020, 6:51 PM UTC

dmje wrote: post #210

I just see tax dodgers as morally redundant people. I try hard to think about it another way, but I just can't. It seems obvious to me from reading extensively around this that we have very little basis for arguing the case for free will. Our entire existence: our personal lives, our business lives, our investments, our health, our wealth - are driven by luck. I run a successful small business in the UK. I can squint…

If all choices are reduced down to luck that would include moral choices. If morality is a matter of deterministic luck, there is hardly any meaning between right and wrong. If there's no way to be morally right or wrong, what's motivating you to be so upset with others' pseudo-random choices and opinions?

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#324

Post by jahaja » Thu, Oct 22, 2020, 6:51 PM UTC

sempron64 wrote: post #125

I'm not wealthy enough for a wealth tax to apply, but a wealth tax is a colossal privacy and administrative burden on _every single taxpayer_. Assets must be accounted for when calculating wealth, so the tax service will be required to track and value assets including vehicles, homes, and material good etc. for every citizen to see if the wealth tax would apply to them -- if we didn't report material goods, the wealt…

The good thing about accounting for wealth is ofc that we can measure inequality much more precisely. That's good right?

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#325

Post by nickpp » Thu, Oct 22, 2020, 6:51 PM UTC

Spooky23 wrote: post #244

jquery wrote: post #114

Earlier quoted context omitted.

> This is good for the economy. Not at all clear to me this is the case.

Hoarding wealth is bad for the economy, as it lowers the velocity of money. See: https://fred.stlouisfed.org/series/M2V Our current policy is to paper over bank liquidity or other problems by printing money. Big institutions and the mega-rich are hoarding massive quantities of cash. The economy as a whole would be better off if billionaires were doing stuff with their money rather than hoarding shares.

You do realize that nobody keeps that cash on hand, right? It’s in banks where it gets lent out, thus participating and contributing to the economy.

"Hoarding" is nonsense.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#326

Post by nickff » Thu, Oct 22, 2020, 6:53 PM UTC

erentz wrote: post #269

sempron64 wrote: post #125

I'm not wealthy enough for a wealth tax to apply, but a wealth tax is a colossal privacy and administrative burden on _every single taxpayer_. Assets must be accounted for when calculating wealth, so the tax service will be required to track and value assets including vehicles, homes, and material good etc. for every citizen to see if the wealth tax would apply to them -- if we didn't report material goods, the wealt…

One time wealth taxes on things like expensive cars, art, and houses can be levied at the time of purchase. That's just sales tax and already is recorded. Annual wealth tax on land/property is easy, we already do it it's just not done in a progressive manner. Again that's already recorded. Annual wealth taxes on things like securities, stocks, bonds, can be accounted easily by any broker and reported. Again this is a…

You'd be incentivizing the accumulation (and importation) of the sales-taxed goods as long term stores of wealth, and dis-incentivizing domestic investments in businesses and construction. I think that's a bad idea.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#327

Post by rrrrrrrrrrrryan » Thu, Oct 22, 2020, 6:53 PM UTC

timerol wrote: post #299

adverbly wrote: post #249

Earlier quoted context omitted.

I stopped reading when I hit: > wealth tax is a colossal privacy and administrative burden on _every single taxpayer_ I have not seen a single wealth tax proposal that doesn't have a gigantic cutoff where it would do nothing for 99%+ of the taxpayer base. Most proposals have a floor in the tens of millions.

The burden is showing that you have under $XM in assets. You'll need to show your net worth somehow, so that the IRS (or equivalent) knows not to tax you. Otherwise I could assure you that I totally only have $1M in assets, with definitely no Swiss bank account or yachts. I will admit to not knowing much about a wealth tax, so maybe there is an established solution here. But it seems like the default would be a priva…

It wouldn't be a burden for most people; it would just be a yes/no checkbox alongside the many other checkboxes when you're filling out your taxes.

"Do you have assets in excess of $X million?"

If you claim you don't, and the IRS has reason to suspect you do, you're opening yourself to a brutal audit and potential jail time.

Most people would not have to deal with this.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#328

Post by rayiner » Thu, Oct 22, 2020, 6:54 PM UTC

coliveira wrote: post #53

tonystubblebine wrote: post #6

As a business owner, when taxes are low, I see that as an incentive to pocket profits. But when taxes are high, I see that as an incentive to hide the profits by investing in the future. I know this isn't always the case with everyone. And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them. But this incentive is so blatantly obv…

This is so hidden in the debate that it is almost like a "secret". The more taxes you have on corporate income, the higher the incentive for corporations to invest in the company, so they can avoid paying taxes. This is good for the economy. On the other hand, lowering corporate taxes also generates a cascade of tax avoidance, since you have higher profits that generate the need for more complex tax avoidance schemes…

These arguments sound truthy, but economists generally agree that lowering corporate taxes is good for the economy: https://www.npr.org/sections/money/2012/07/19/157047211/six-...

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#329

Post by onlyrealcuzzo » Thu, Oct 22, 2020, 6:54 PM UTC

maerF0x0 wrote: post #88

I will say that this article points out a CNBC article on "$400k in a big city...". And FAIR seems to be missing that both earnings _and expenses growth_ have been growing very fast for those in cities. Progressive taxation of someone earning $100k per year in San Francisco or NYC is hardly fair. At least prior to covid19 causing a crash in the rental market one could expect to pay ~$2500 a month to share a 2bedroom…

If people were taxed less, housing and rent would be even more expensive in SF.

The solution to the problem is not taxing people in SF less. This is the same flawed idea that the solution to houses being unaffordable is to have a mortgage interest deduction and (previously) a property tax deduction for home-owners.

All this did was make houses and land more expensive to make up for the tax deduction.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#330

Post by gamblor956 » Thu, Oct 22, 2020, 6:54 PM UTC

1123581321 wrote: post #285

azinman2 wrote: post #196

Earlier quoted context omitted.

I think the GP is saying that one avoids taxes by investing in things that grow the company, jobs, R&D, etc. I don’t know if this scales all the way up when all the big co’s move their HQ’s offshore. Perhaps we need diff positions for diff business sizes.

If so, they are confused because they are thinking of expenses as paying for themselves with the taxes saved. A business with a lower tax rate would make the same investments and have more money left over, or make more investments with the same money.

The expenses do pay for themselves. Assume you have profits in Year 1.

If you pay for an expense with pre-tax income (i.e., in December, assuming a calendar tax year), that reduces your tax liability on your profits for the year, for an effective discount of X% on that expense (where X is your effective tax rate).

If you buy that same expense with post-tax income (i.e., in January of Year 2), you don't get the effective discount, and you won't know until the end of Year 2 if it will reduce your Year 2 taxes. Also, you have to wait a year to get any tax benefit out of the expense.

The cost of waiting just a few weeks can be huge. This is why many companies (or corporate departments) choose to blow the remainders of their budgets rushing through projects at year end rather than just taking the time to do things properly after the holidays.