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

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

#371

Post by rrrrrrrrrrrryan »

erentz wrote: post #311
Lammy wrote: post #175

Earlier quoted context omitted.

They'll all be in New Zealand in their other private compounds.

I love this idea that they think Kiwis, with the huge and growing wealth inequality problems there too, somehow will welcome the billionaires from America and won't come for them in their Queenstown mansions.

Yeah, relative to other nations, Kiwi governance is extremely responsive to the will of its citizenry.

Compared to America, I think they're much more likely to end up taxing the snot out of their own billionaires (both imported and domestic).

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

#372

Post by conanbatt »

theandrewbailey wrote: post #293
maerF0x0 wrote: post #143

Earlier quoted context omitted.

As an immigrant I concur. I have taxation without representation.

Filling your census form allocates Congressional and Electoral College representation to your state, regardless if you're a citizen.

Not really a replacement for voting.

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

#373

Post by Enginerrrd »

sempron64 wrote: post #170
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…

Another chilling effect may be in motivating barter rather than currency trade so that assets may undervalued. Consider real estate trades or corporate mergers instead of cash purchases that are executed at deflated valuations to lower wealth valuations of the underlying asset. This devalues the dollar in relation to assets.

This was my thought as well. If you discourage holding stocks and things over other assets as stores of value, I think that could have some deflationary effects. Not only that, but companies are then somewhat disincentivized from growing in valuation, but finding ways to grow in their reach/authority/power etc. The end result seems deflationary... i.e. companies worth more for less dollars.

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

#374

Post by maerF0x0 »

didibus wrote: post #231
maerF0x0 wrote: post #121

Earlier quoted context omitted.

If we tax wealth, people will be incentivized to generate non-wealth things. Why buy a stock if Biden will take 1% of it annually? May as well just buy rapidly depreciating status symbols instead.

> Why buy a stock if Biden will take 1% of it annually? May as well just buy rapidly depreciating status symbols instead Because the stock will allow you to avoid paying taxes. By investing revenue in investment, as a company, you can avoid paying tax on the money. So if you're a small or medium sized business, you have two choices: 1) Cash out and buy a rapidly depreciating status symbol with the money, but get taxe…

> depreciating status symbols is also a contributor to the economy

Yes, for a single iteration, but it's a vicious cycle of shrinking the pie.

versus creation of new (true) assets makes the pie bigger. A bigger pie means the tax slice grows and there is more to go around. I agree that, for example, Bezos having $300Bn locked up in non-taxable is not ideal too. Ideally that would have been taxes as an "income" as it grew.

Maybe something like the required minimum distribution from 401k would be a good solution?

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

#375

Post by gbronner »

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…

It is only good for the economy if the reinvested money is more productive than what the the owner of the company would have done with it. This encourages vanity projects.

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

#376

Post by nickpp »

mikepurvis wrote: post #27
muststopmyths wrote: post #15

Earlier quoted context omitted.

My guess: because they hope to be wealthy some day.

A famous formulation of that is: "John Steinbeck once said that socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires."

And probably that was the secret to America’s success: people seeing themselves as future winners and not permanent victims.

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

#377

Post by topicseed »

Spare_account wrote: post #162
throwaways885 wrote: post #24

Earlier quoted context omitted.

Doesn't everyone? Plus, there's other reasons to be skeptical of wealth taxes, capital flight is a real thing.

>capital flight is a real thing. Can anyone provide some examples of it happening in an economy like ours?

Not sure if "France" is an "economy like yours" but they have definitely suffered from capital flight following a wealth tax hike[0][1].

[0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1268381

[1] https://www.forbes.com/sites/jonhartley/2015/02/02/frances-7...

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

#378

Post by 1123581321 »

gamblor956 wrote: post #330
1123581321 wrote: post #285

Earlier quoted context omitted.

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 effect…

A discount is of course not the same as paying for itself (e.g. a 100% discount.) Some people think of reduced taxes as being a dollar-for-dollar credit (not you, of course.)

The forced spending by the end of a fiscal tax year is often offset by delivery or implementation contracts to mitigate the damage of having to time the purchase for tax purchases.

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

#379

Post by disgruntledphd2 »

czbond wrote: post #127

Near 50% of American pay zero federal tax. The top 10% of all Americans pay 69% of all federal taxes currently. This is a point 'left out' of current discussions. Instead of increasing entitlements or adding yet more taxes - we lower the size of the government spending UNTIL it matches where most people pay for the services received in a more scaled manner. Source: https://taxfoundation.org/summary-latest-federal-inc…

What proportion of overall income do these people earn?

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

#380

Post by gamblor956 »

maerF0x0 wrote: post #174
munk-a wrote: post #153

Earlier quoted context omitted.

Why work as an average american is the government will take 22% of it? Probably because trading stocks will still leave you with a lot more money than if you threw a tantrum, took your toys home and hid your money under your mattress - no plan that I've seen has investors paying capital gains at the level of their equivalent income - investment is still heavily subsidized.

> capital gains Capital gains happen on money that has already been taxed as income. Capital Gains tax is less because it's round 2 of the taxation game. Also taxing assets on their capital means people will not invest in capitally intensive projects. For example building a new housing complex returning 3% per year (after inflation) is 33% less interesting with an additional 1% wealth tax (on the capital) ...

It's very possible to get capital gains on something that has not been already taxed as income.

For example: say you purchased 100 shares of Tesla stock a decade ago and sold it today for lots of capital gains. But Tesla has never posted an annual profit on a tax basis, and thus the "income" underlying the shares you sold was not taxed.

In fact, the capital gains rates were never about avoiding double taxation. It was simply a giveaway to Republican donors by the Reagan administration.

You probably mixed up capital gains and dividends. The logic behind giving dividends special rates (including a 0% rate for certain inter-corporate dividends) is that the corporation paying the dividend has already paid an income tax on those profits, so the shareholders should not be subject to full tax on the shares of the profits they receive, but should still pay some tax to account for the benefits of using the corporate form.

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