How to convert between wealth and income tax • Hacker News Board

Re: How to convert between wealth and income tax

#581

Post by cherry_tree » Sat, May 23, 2026, 2:46 AM UTC

servo_sausage wrote: post #449

harimau777 wrote: post #380

Earlier quoted context omitted.

Them moving somewhere else is an easy fix. Just put an exit tax on the ultra wealthy.

Even that is subject to shenanigans... above a certain level of wealth the overhead of establishing companies, tax residencies, and complex debt arrangements become a rounding error. Some of the mechanisms are loopholes, that might be closed l. But many start to interact with international business regulations that exist for considered reasons, and are harder to change even if it is serving as a loophole. You end up…

Sanction them and their companies. Sanction countries that accept these anti-society misanthropes. Bar them from the US and any territories, encourage our allies to bar them as well. Investigate those companies for crimes to the full extent of the law.

Nobody needs these billionaires; we can create new billionaires and new products. They think they bring some sort of ultra speciality but in reality they are doing something millions want to do and their monopolistic success is preventing others from succeeding; knocking these giants down makes rooms for new businesses and products. This is the entire thrust of a capitalistic economy.

Re: How to convert between wealth and income tax

#582

Post by xphos » Sat, May 23, 2026, 2:47 AM UTC

jppope wrote: post #97

__turbobrew__ wrote: post #64

> In fact the conversion rate between them is about 20. A wealth tax of 1% is equivalent to an income tax of 20%. Sure, but you actually have to work for continued income. Wealth accumulates with no input once established. Wealth has the ability to increase (capital gains) without having to pay tax until it changes hands, whereas when income increases it is immediately taxed at a higher rate. Additionally, wealthy pe…

> Wealth accumulates with no input once established. This is incorrect, historically you'll pay a ~2%-3% loss via inflation if you keep your money in cash. If you invest (making it capital) in bonds or securities then you will see accumulation, but thats actually a risk premium. > Additionally, wealthy people can use securities as collateral for near zero interest lifetime loans which also bypass having to pay income…

Yeah but the 5% Paul used is also kind of conservative since the 1970s stock market returns is like 10% ignoringinflation. Its a big difference if your well grows 7% verse 5% a 1% wealth tax with that in mind is only 15% but i think factoring in inflation is unfair concerning labor pays tax after inflation. That brings the rate down to 10% and thats without taking any significant risk.

I think a real solution is a forced step up in bases every year so people cannot put taxes off forever. It can be modest too 5% of your investment value delta. You could make the carried lost yoy track the net so you cannot be forced to pay when things are down.

Also the idea that capital gains tax should be less than income tax rate is strange. Like the people that own large amount of capital are in the lowest risk situations why should they also.have the most generous tax positions it makes no sense. No real person things the business owner who gets large returns is actually worse off or in high risk because if they were they'd be culled by economic evolution

Re: How to convert between wealth and income tax

#583

Post by AnimalMuppet » Sat, May 23, 2026, 2:51 AM UTC

adverbly wrote: post #579

AnimalMuppet wrote: post #558

Earlier quoted context omitted.

No, why? If we're going to do a wealth tax, then do a wealth tax . Why single out only one kind of wealth, and the kind that is not even the most important these days? (What's more important? IP. The value of Google, say, isn't in the land it owns. It's in the code, the database of web pages, and the google.com domain name.)

> Why single out only one kind of wealth Because of some very good reasons. See: https://www.youtube.com/watch?v=smi_iIoKybg > kind that is not even the most important these days uhhh source on that? I'm pretty sure land is literally the largest asset class in the economy. Real estate is by many estimates over 2X as large as the entire combined global market cap of all publicly traded companies. https://europhoenix.c…

No, I'm not going to watch a video to see what your point is. Either tell me, or don't.

Re your last paragraph: I admit I'm surprised by that. Still... Georgism calls for a tax only on the value of the land, not on the improvements. Of all that money in real estate, how much is in the improvements, and how much is in the raw land?

> This figure includes only high quality retail property, offices, industrial, hotels, residential, other commercial uses, and agricultural land

From this I gather that a large chunk of it is the improvements.

And, if real estate is the biggest category, why focus just on the land part of that, and ignore all the improvements on it?

This article is about a wealth tax. The arguments for Georgism are about something else - about social policy. It may even work as social policy, though I have at least some doubts. But as a wealth tax, it's not very effective. (If I were a rich person, I could buy a $100 million apartment in New York, and have the rest of my assets in stocks and gold and art, and my tax liability would be for my pro-rated fraction of the land that the high rise that held my apartment occupied. As a wealth tax, that's got far too many loopholes to be useful.)

Re: How to convert between wealth and income tax

#584

Post by hashmap » Sat, May 23, 2026, 2:57 AM UTC

anon291 wrote: post #554

jwlake wrote: post #487

Earlier quoted context omitted.

2008 was literally people getting mortgages on unrealized gains, and then getting more loans. Even if the market wouldn't support the sale, they borrow against it and then get another load and causing an asset bubble. Its not ancient history.

My issue is singling out stocks for this. Try telling people they're laying taxes on their heloc and that this is now income so their 300k heloc cash out now puts them in the highest tax bracket! Good luck Of course people taking out equity cash for investments are actually putting the money for productive use. How about there's no capital gains tax on equity if it's rolled into another investment of any kind. Elimin…

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Re: How to convert between wealth and income tax

#585

Post by pfannkuchen » Sat, May 23, 2026, 2:58 AM UTC

BosunoB wrote: post #488

jppope wrote: post #312

Earlier quoted context omitted.

> intentionally obscuring the fact that the vast majority of people would pay ~no wealth tax or unintentionally forgetting that the vast majority of people would pay ~no wealth tax. I consider this fine, because proponents of a wealth tax consistently omit that it will ultimately be the middle class who pays the tax... the ultra-wealthy and wealthy can afford sophisticated strategies to render a wealth tax ineffectiv…

If you paid attention to proponents of a wealth tax in the US, you would be aware that they only ever suggest it for vast wealths of like $10 million+.

That’s like 2 pretty good houses in the bay area. Hardly “vast wealth”, and these sorts of things are rarely inflation adjusted over time.

Re: How to convert between wealth and income tax

#586

Post by WalterBright » Sat, May 23, 2026, 3:07 AM UTC

lambdaphagy wrote: post #577

dh2022 wrote: post #566

Earlier quoted context omitted.

Like I said: the sky is not falling.

I don’t think I understand your argument. If a wealth tax causes the wealthy to leave then you have even less tax revenue than before, right?

You also lose the jobs the wealthy were paying for, and the taxes those employees would have paid, and the sales tax the wealthy are no longer paying, and so on.

Re: How to convert between wealth and income tax

#587

Post by lovelearning » Sat, May 23, 2026, 3:10 AM UTC

credit_guy wrote: post #516

mannanj wrote: post #471

Earlier quoted context omitted.

Does the government not have the goal to make society a more just society? When did that stop being a priority of government? Even a teeny, tiny one?

Sure, the government has that goal too. But the government has many tools, and using taxes for that is using the wrong tool. Or maybe you think that billionaires owe us not only to pay taxes, but also to play nice, and pay those taxes with a smile on their face?

What are those other tools?

Re: How to convert between wealth and income tax

#588

Post by Dylan16807 » Sat, May 23, 2026, 3:10 AM UTC

NoMoreNicksLeft wrote: post #571

Dylan16807 wrote: post #567

Earlier quoted context omitted.

That sounds like a one-time thing. Once things stabilize you wouldn't see a big fluctuation every time a CEO has to pay taxes. Also normal people and the mildly rich and retirement funds and many other big sources of ownership wouldn't be taxed, so I don't see prices actually crashing.

>That sounds like a one-time thing. Repeatedly pushing the "destroy the world economy" multiple times per day is most likely not going to be a "one-time thing". But who knows... maybe you're right and economics doesn't work like it has been documented to work by the world's experts for the last 100 years or so.

Because that's not what the button does...

Especially because every push shrinks the number of people affected by the button.

Re: How to convert between wealth and income tax

#589

Post by analog31 » Sat, May 23, 2026, 3:18 AM UTC

lazide wrote: post #562

analog31 wrote: post #541

Earlier quoted context omitted.

If someone sells the stock, someone else buys it. The value is still the net present value of future earnings. This is a redistribution of wealth, not a decimation. The wealthy can still earn more if they want to.

When market cap goes down because overall valuation does, what do you think is happening? Valuation hasn’t been tied or related to earnings for top stocks in at least a decade. It isn’t ’wealth redistribution’. Removing half or more of market demand isn’t going to be pretty.

Market cap and valuation are the same thing.

Re: How to convert between wealth and income tax

#590

Post by satvikpendem » Sat, May 23, 2026, 3:22 AM UTC

Glyptodon wrote: post #220

satvikpendem wrote: post #202

Earlier quoted context omitted.

> But Graham's math is only applicable to those flush with investments and with relatively small salaries from labor, so a wealth tax is only unpopular to that particular group. That can be quite a lot of people on HN, and also including FIRE people, so I can see why it's unpopular.

Most FIRE people aren't going to have $50 million plus and be hit by this.

I said on HN including those who are FIRE, where the net worth of the average individual here is much higher than the average and some do, yes, have $50 million or more in assets.