what utter fear mongering bullshit
Modeling a Wealth Tax
571–580 of 1001 posts
Re: Modeling a Wealth Tax
#572Boooooooo This is just bad (bad == misleading) math. Where's the appreciation of the assets? Where's the real examples from other countries that have tried wealth taxes? I don't know what he's _trying_ to do, but the effect of his rhetoric certainly seems to me that "If you won the lottery, you this would be bad for you! [but if you don't, it'd be great for you, and really only bad for ultra-rich people like me]" I'd…
> I don't know what he's _trying_ to do
He's trying to justify policies that keep himself rich.
Re: Modeling a Wealth Tax
#573We provide a wealth safety net to insure against large loss of capital, think TARP, so then some portion of benefits from large increases should also be shared.
It is unfair to ask a country to socialize your losses, but not benefit from your wins.
Re: Modeling a Wealth Tax
#574Earlier quoted context omitted.
>If you have a bucket of money that isn't doing anything, then what value does it actually bring to the economy Wealthy people don't just leave their money under a mattress, they invest it in something. Even if they just left it in a bank, the bank is still going to lend that money out and invest it. Taxing wealth just encourages riskier investments, as higher risk is needed to achieve comparable post-tax return.
Evidence points to the contrary: Taxes reduce profitability and therefore limit risk taking behaviour by companies. Same is most likely true for individuals because it reduces their income.
> Taxes reduce profitability and therefore limit risk taking behaviour by companies.
But taxes provide services that give people a greater safety net. Healthcare is the canonical example but there are many other ways that taxes can help ensure that one mistake does not ruin the rest of your life.
Personally, I would love to live in a country where businesses took fewer risks and individuals could take more.
Re: Modeling a Wealth Tax
#575Instead of a wealth tax, maybe just increase the capital gains tax rate for the ultra-wealthy? Seems a lot more straightforward.
Re: Modeling a Wealth Tax
#576I still feel like the micro-tax[0] to replace every single form of tax would be better and simpler. Just 0.1% any and every single transaction is pretty simple to understand. Thus, the more money moves around, the more it will be taxed.
The example on the website was for Switzerland which does a lot of transfers due to their reliance thereon, but it wouldn't surprise me if it worked for America too. Wealthy Americans do invest in stock and move their money around way more than the average American.
Or, if wealthy Americans are such upstanding patriots, they'd be for a return to income taxes as in the 40s to 60s (80-95% for the highest tax bracket). [1][2] Then all of this "wealth tax" talk would be over.
And if people really wanted to have a more level playing field, they'd vote to get rid of inheritance altogether aka raise the inheritance tax to 100%. With the tax income from that, working out a scheme to create equal learning and living environments for kids nationwide could be discussed. Longer maternal and paternal leaves and monthly payments from the government for supporting children from birth until graduation wouldn't be farfetched.
0: https://mikrosteuer.ch/en/the-initiative/concept/
1: https://talkmarkets.com/content/us-markets/tuesday-turmoil--...
2: https://www.irs.gov/statistics/soi-tax-stats-historical-tabl...
Re: Modeling a Wealth Tax
#577I once did a bit of napkin math for a progressive friend of mine and have used it more widely since. Most people end up shocked and unwilling to accept this, which amuses me. I ask: "Suppose the government took 100% of corporate profits every year and distributed them evenly to the people, how much will everybody make?" I do this for Canada and if you take the average of corporate profits over the last 10 years and d…
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Re: Modeling a Wealth Tax
#578This seems like a fairly dishonest presentation.
It only considers the fraction of shares, not the value. If you make the (reasonable) assumption that the value is going up (and going up more per year then the tax) your net worth still grows quite well, and you will be very wealthy.
Re: Modeling a Wealth Tax
#579The problem isn't the wealth tax but about creating a taxation system and monetary policy that actually helps people. There is this false assumption that a wealth tax will somehow eliminate wealth inequality. If you have an already broken economic system you will end up with more money in a broken system and it won't yield better results for the average person. But this is about marketing and "winning" not about prog…
Property taxes are a wealth tax, specifically a tax on real estate wealth. It's hard to see why taxing this form of wealth is so great, but other forms of wealth is so bad. As for the argument that the US should be more decentralized - less money goes to the federal government, more to the states - this may or may not be true, but this applies equally to all taxes, not wealth taxes in particular.
Property taxes allow people to see the direct benefit immediately. As an individual you get control over taxes to an extent through purchases. And because the federal government misspends half of the taxes it collects so instead of giving them more give them less but pay more in taxes directly to the states.
Re: Modeling a Wealth Tax
#580Perhaps 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…
Agreed. I doubt a very wealthy man's short blog post against taxing very wealthy people would make it to the front page of HN if it wasn't for the identity of the very wealthy man.
Is the blog post "against taxing very wealthy people"?
Literally, it is a demonstration by mathematics of the effect of a tax on capital.
Polemically, it is an argument by induction that a higher level of such a tax will discourage junior entrepreneurs from attempting to create start-ups in a jurisdiction.
What's clever about the polemic strategy is how it appeals to the hopes and fears of young entrepreneurs who have not yet accumulated great wealth, to recruit them to support the interests of older entrepreneurs who may have done so in the absence of the tax.
"Suppose you start a successful startup in your twenties" gets you hooked. You readily identify and strap yourself in for the ride.
"if you live for 60 years after acquiring some asset" appeals to your fears by tapping in to your understanding that once you are older, you will not have boundless energy, and unbridled understanding of the zeitgeist. You'll need protection then.
The young entrepreneur, with little wealth accumulated, consults the table, reads linearly down from the top to the lower right, building understanding, until bang 95%! At this point, he or she viscerally feels the pain of losing 95% of his or her capital, which, at this point, still being meagre, is unbuttressed by the psychological accoutrements that great wealth affords its owners.
The conclusion is genius.
"Even a .5% wealth tax would start to keep founders away from a state or country that imposed it. That's more than a quarter of your stock." Ouch! The budding entrepreneur must now pack up and move to have any chance at a decent life. The tax must be resisted!